ECONOMY

A watershed month for lenders

Rapid developments are foreseen in the Greek banking sector in coming weeks as the government will proceed to finalize the law on the recapitalization of lenders. These are running concurrently with intensifying merger and acquisition plans.

September is seen as a watershed month, as it will become clear whether the country will improve the long-term viability of its debt mountain or edge closer to an exit from the eurozone. The government hopes to have the law on recapitialization voted through next month. According to all indications, in line with the country?s international creditors, it does not favor a scheme that will lead to the full nationalization of banks and reports say that the law will provide strong incentives for the participation of private capital. This has the added advantage of reducing the respective participation of the public sector.

France?s Credit Agricole group will have decided before the end of August which of the three suitors — National, Alpha and Eurobank EFG — to select as a buyer for its Emporiki Bank subsidiary.

According to reports, Societe Generale is also planning the recapitalization and sale of Geniki Bank.