Gov’t prefers foreign partners

Greece does not favor further mergers and acquisitions between domestic banks and would prefer to see collaboration with foreign lenders on grounds of competition, the country’s finance minister said yesterday. «We are not encouraging mergers between the major Greek banking groups,» Finance Minister Giorgos Alogoskoufis said during a lunch with foreign correspondents when asked whether recent pension fund reforms opened the way for more consolidation. «On the other hand, we do encourage collaboration between Greek banks and foreign groups for reasons of domestic competition.» Last week Greece passed pension fund reform legislation, setting the stage for a single supplementary fund to address a system plagued by deficits. The move was prompted by the adoption of International Financial Accounting Standards (IFRS) this year, which forced Greek banks to fully reflect pension fund liabilities and any impact on their capital adequacy. Some analysts say the highly fragmented pension system, with widely different employee and employer contribution arrangements, distorts competition and is a hurdle for restructuring, mergers and acquisitions in the sector. Asked whether France’s Credit Agricole would raise its current 11 percent stake in Emporiki Bank, the minister said such a move would be welcome. «If Credit Agricole wanted to increase its stake in Emporiki, we would be pleased. If not, there will be others.» Emporiki, Greece’s fourth-largest lender, is planning a 500-million-euro rights issue to boost equity as it faces a big pension fund deficit.

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