NEWS

Government spokesman assures Greeks bank deposits safe after lenders' merger called off

Government spokesman Simos Kedikoglou assured Greeks on Monday morning that their bank deposits were not in danger after it was announced on Sunday night that the merger between National Bank and Eurobank was not going ahead.

“Deposits at National and Eurobank are absolutely safe,” said Kedikoglou a few hours after the Bank of Greece announced the two lenders would be recapitalized separately rather than merging.

“The two banks could not get the 10 percent share capital increase they needed from private investors and legislation meant that no extension could be given.”

The two banks’ share prices fell by the maximum permissible 30 percent on Monday morning. Alpha Bank shares dropped 11 percent and Piraeus Bank by 9 percent.

The merger of National and Eurobank had prompted scepticism from the troika recently and in the latest round of talks with the Greek government, the visiting officials let it be known that they were against the deal.

It was one of several obstacles in the talks aimed at securing two loan tranches worth a total of 8.8 billion euros for Greece.

The other was firings in the civil service. Kedikoglou said the Greek government had agreed with troika that every civil servant fired would be replaced by a new hire who has passed the state-run ASEP process.

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