By Yiannis Papadoyiannis
The difficulties emerging in reaching an agreement on the terms of the recapitalization of Greek banks is likely to postpone the announcement of the details of its application, set for today, although the commercial lenders will receive a formal assurance they are to receive 23 billion euros to boost their capital.
With the country’s main banks set to present record losses upon announcing their 2011 financial results on Friday, Kathimerini understands that the Hellenic Financial Stability Fund (HFSF) will send a letter to the management of National, Eurobank EFG, Alpha and Piraeus this morning that will state its commitment to paying the money needed for the recapitalization if the lenders stick to the capital enhancement plans they have submitted to the Bank of Greece.
The country’s central bank has already approved those plans as realistic, and the HFSF letter will allow the accountants to sign certificates that the lenders are risk-free. That is particularly important as the delay in the finalization of the terms of the planned recapitalization had rekindled worries about a possible crumbling of the local credit system.
On Thursday Prime Minister Lucas Papademos met with Central Bank Governor Giorgos Provopoulos, but their meeting proved inconclusive regarding the details of the process.
The sticking point is how the private character of the lenders can be retained.
The structure of the intervention and the incentives for the participation of the private sector will likely be decided by the government to emerge from next month’s elections.
Marfin Analysis estimates that in order for the country’s main banks to restore their capital base and to strengthen their Core Tier I index up to the 10 percent threshold, National Bank will need to find 6.6 billion euros, Eurobank must get 4.6 billion, Alpha needs 2.6 billion and Piraeus should draw 4.6 billion euros.