ECONOMY

Credit Agricole packs up

France’s Credit Agricole, until recently considered the prime candidate to take over a controlling stake and the management of Emporiki Bank, Greece’s fourth largest, now appears ready to sell off its 11 percent stake, worried about the government’s inaction in relation to the bank’s heavy liabilities for staff pensions as well as about the bank’s current share price. According to sources, Credit Agricole asked the Economy and Finance Ministry for an extension to the November 16 deadline, giving the French bank the right of first refusal on the state’s remaining 10 percent stake. The French are asking for a few months’ extension, but the ministry has refused to commit itself and is already looking to alternatives. According to sources, the ministry has agreed unofficially to extend the deadline to early 2006. However, as things stand, Credit Agricole’s exit is quite likely. It has already sent out unmistakable messages, such as its non-participation in the latest placement of Emporiki shares, its public announcement that it considers the bank overvalued and its refusal to commit itself to the forthcoming capital increase. Also, during Tuesday’s board meeting, Credit Agricole’s representatives criticized the management’s financial targets for the next three years as excessively optimistic. On the question of employees’ pensions, the government passed a law in the early summer over the heavy objections of bank employees, creating a new state-operated auxiliary pension fund that would lift a heavy burden off banks. Emporiki Bank management was the first to apply to join the new fund; however, the government commission that is to examine its application has not yet met. Next month, Emporiki will increase its capital by 397 million euros. Despite its lack of commitment, it is thought that Credit Agricole will participate as that would also help its exit strategy. The government is now considering, should Credit Agricole withdrawal, selling both the French bank’s stake and its own, about 21 percent, to a strategic investor. However, Economy and Finance Minister Giorgos Alogoskoufis insists on selling that stake to a foreign investor, in order, he says, to improve competition in the sector. Alternatively, the government is considering selling the 21 percent stake to foreign institutionals and retail investors.