Bank merger in the premier’s hands

Prime Minister Antonis Samaras will seek a political solution on the issue of the merger between National Bank and Eurobank Ergasias at a meeting with the representatives of the country’s international creditors on Sunday morning.

The timetable for the credit sector’s recapitalization process was the focus of Friday’s round of talks between technical experts from the European Commission, the European Central Bank and the International Monetary Fund – known as the troika – but the IMF representative reportedly insisted that the National-Eurobank tie-up would come with risky consequences for the public debt.

This concern was confirmed by European Commission spokesman Olivier Bailly on Friday in Brussels. He stressed that the troika is not vetoing the merger, as press reports in Greece have suggested, but that there is skepticism regarding its impact on the fiscal figures.

He added that “in the case of a country like Greece, which is involved in an economic adjustment program, when it comes to mergers, the Commission will not only examine issues related to market competitiveness but also how the merger in question will influence the debt burden and the deficit of that country, particularly when the state increases its participation in the shareholder composition.”

According to the troika’s revised calculations, the two banks’ needs in the recapitalization will reach up to 17 billion euros after a merger, from 15 billion. This is due to forecasts regarding the recession and a dispute over the level of synergies as assessed by the committee coordinating the merger.

In the technical experts’ meeting on Friday, National officials presented an increased level of synergies to emerge from the bank union, amounting to 4 billion euros in present value, i.e. 700 million euros per year from the third year onward, against 600 million originally estimated.

A high-ranking Finance Ministry official commented on Friday evening that while the troika “cannot veto the deal, it is they who are putting the money in. They want to be assured of the synergies and that they will not want to provide any more money for the recapitalization.”

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.