ECONOMY

Recapitalization process gets under way

The Hellenic Financial Stability Facility (HFSF) approved on Tuesday the disbursement of 18 billion euros for the temporary recapitalization of the country?s four major commercial banks, which is expected to be completed by Friday.

The process begins on Wednesday, with the HFSF transferring European Financial Stability Facility (EFSF) bonds totaling the above amount to National Bank, Alpha, Eurobank EFG and Piraeus via a special account at the Bank of Greece. Bank officials say this injection of capital will be decisive in strengthening the local credit system at this particularly difficult conjunction and will lead to a further reduction in the outflow of deposits.

On Tuesday Alpha?s general meeting heard Chairman Yiannis Costopoulos confirm the failure of the lender?s merger talks with Eurobank while suggesting that were the two lenders to join forces they would need funds of at least 9 billion euros in order to survive. ?Such a merger would not only be unable to generate value, but it would also require much more in funds than originally estimated to be sustainable,? Costopoulos said.