The first big privatization of 2006 looks likely to be Emporiki Bank, where a strategic partner will also undertake the management. If everything goes according to the government’s plan, the sale of a further tranche of Greece’s fourth-largest lender will yield about 700 million euros for public coffers – about half of the target set from all privatizations next year. If the winner of the tender is a large foreign bank, which is likely, the most important effect will be challenging the prevailing cartel mentality among Greek banks and bolstering competition. To be sure, the rise in Emporiki’s capital value – which has made the bank an attractive proposition for further privatization after Credit Agricole’s acquisition of a 9 percent stake in 2000 – is the cumulative result of concerted efforts by President Giorgos Provopoulos to rehabilitate the bank in the last 22 months. The main parts of this recovery effort were: – finding a solution to Emporiki’s problem of unfunded social insurance liabilities, the most serious in the sector. – Increasing the 400-million-euro share capital, a move which has drawn warm responses from investors and which will be completed on December 21. – Selling a 5.5 percent stake in the bank’s share capital, at zero discount, to foreign institutionals last July. Emporiki bolstered its liquidity by about 150 million euros. Today, foreign institutionals – aside from Credit Agricole – own about 20 percent of the bank, against about 5 percent 18 months ago. During the bank’s recent road show abroad, foreign institutionals told Provopoulos that Emporiki is the latest example of a successful rehabilitation of an ailing bank in the EU. – Combining the aforementioned rehabilitation factors to push a 70 percent gain in Emporiki’s share price in the last 18 months. If Credit Agricole wins the coming tender of a 9.5 percent stake now held by the Public Porftolio Management Agency (DEKA) – together with another 10 percent owned by the Postal Savings Bank – the government will put about 700 million in its coffers. Credit Agricole’s relations with Emporiki have been rather tumultuous lately, after Provopoulos revealed a secret clause in the 2000 contract, which granted the French the right to sell back their shares at the purchase price when they decided to pull out. This was challenged by the government and found to be against Greek law. The French then felt it was time to abandon their disinterested stand and said last week they would participate in the share capital increase and possibly go for a larger holding and the management later. Meanwhile, according to the latest reports, one Portuguese and three Spanish banks are also interested in Emporiki.