Government chooses bank mergers over closures

Finance Minister Yannis Stournaras said on Friday the government plans to reduce the number of banks through mergers and that a Blackrock review of bank portfolios will be released after a recapitalization plan is completed.

?We chose the path of mergers and not of shutting down banks, as in other European Union countries,? Stournaras told lawmakers in Athens. ?Deposits are completely guaranteed.? Hellenic Postbank SA was deemed unviable, Stournaras said. Greece must press ahead with its state asset sales plan, where time has been lost, Stournaras said.

To this end, Prime Minister Antonis Samaras has asked the state legal council if it has the authority to cover legal issues related to the country?s state asset sales and real estate development program as well as mergers of state organizations.

The inquiry is part of steps being taken that aim to speed up the state asset sales program and to identify ways to reduce state spending on legal fees for third parties, according to an e-mailed copy of a letter sent by the government to the president of the state legal council at Samaras?s request. [Bloomberg]

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