The government program announced in Parliament heralds major changes in the relationship between the state and Greek banks, some of which will entail a reversal in agreements Greece has made with its creditors. The changes concern the state’s voting rights, the operation of the bank bailout fund and the handling of nonperforming loans.
On Sunday Prime Minister Alexis Tsipras announced in Parliament that the government would obtain full voting rights on the shares of banks it holds via the Hellenic Financial Stability Fund (HFSF), but without harming the rights of private stakeholders.
Analysts say that a change in the law to that effect could take place, but it would reverse the structure of the recapitalization as agreed with the country’s creditors. They add that such a move could be considered unilateral, but it could also constitute a negotiating chip in talks with the country’s eurozone partners.
The same analysts also stressed that it is impossible for the state to obtain full voting rights without harming those of private shareholders. They pointed out that banks achieving or passing a threshold of 10 percent of private holdings to maintain their administrative autonomy (with state shares having reduced rights) was among the main incentives for the recapitalization process.
On the HFSF, Deputy Prime Minister Yiannis Dragasakis said on Monday it would be radically restructured, adding that among the ideas being considered is turning the bank bailout fund into a corporation.
The government is also making plans for the creation of an intermediary entity to manage nonperforming mortgage and corporate loans, with the characteristics of a distress fund. It would have a watchdog role regarding the settlement of debts by banks, and even be able to operate as a debt collector.
This would be the combination of the models used in Ireland since 2009 in order to tackle privately held debt, the national Asset Management Agency that started operating in 2009, and the Insolvency Service of Ireland, operating since 2013.