Two important meetings that could have great repercussions on the Greek economy were held on Tuesday. Prime Minister Costas Simitis met with Theodoros Karatzas, governor of the National Bank, while Economy and Finance Minister Nikos Christodoulakis met with Yiannis Stournaras, chairman of the Commercial Bank. The only statement forthcoming from the Simitis-Karatzas meeting was that Karatzas had briefed Simitis on the state of the domestic banking system in his capacity as president of the Hellenic Banks’ Association. No statement followed the Christodoulakis-Stournaras meeting. A third meeting took place yesterday, between Christodoulakis and one of National’s deputy governors, Apostolos Tamvakakis. It is more than likely, however, that the meetings had a common purpose, namely, what to do with the State’s stake in the two banks. National and Commercial are the two banks that have remained under state control. Not majority control, as in the past, but, even as a minority shareholder, the State still has a big say in their operations. Until recently, a law permitted the government to control the votes of the pension funds which are stockholders. The funds are now officially independent of the State, but their management still relies heavily on state guidance. A tangled web of cross-ownerships and subsidiaries, which especially characterized the National Bank, has begun to unravel in recent years, thanks to Karatzas’s policy of restructuring the bank’s portfolio of shares and getting rid of subsidiaries, even important ones, such as the Industrial Development Bank (ETBA). For all practical purposes, these banks now belong to the private sector. There is little or no reason for the State to hold important stakes in either of the banks. More importantly, these stakes are worth several billion euros. Disposing of them would help the government in its current fiscal straits, with debt persistently high and the State still unable to cut spending enough to create greater budget surpluses. The State currently holds 13.5 percent of National Bank, 5.5 percent of that indirectly, through the Postal Savings Bank. A bill, to be debated in Parliament in October, will transform the Postal Savings Bank into a «societe anonyme» – in preparation for its privatization – and will transfer National’s shares to state portfolio management company DEKA. The Postal Savings Bank also owns a 9.9-percent stake in Commercial Bank. According to sources, the government is seriously considering selling this stake to France’s Credit Agricole Indosuez, which already holds about 11 percent of Commercial. Buying the stake would increase Credit Agricole’s participation in Commercial to 21 percent, making it the dominant shareholder. This move would definitely take Commercial out of the State’s orbit. There are, however, difficulties in implementing this. It is far from certain that Credit Agricole Indosuez, whose main priority is to acquire France’s Credit Lyonnais, will provide the capital to increase its stake. Government officials expressed optimism about Credit Agricole’s intentions but said such a transfer would not take place before the end of the year at the earliest. If the sale does occur, it would be a successful precedent for the sale of the State’s stake in National. This is a far more challenging enterprise but government officials are already considering alternatives, such as private placement, public subscription and share swap, in the likelihood of a strategic partnership with another bank. The increased demand for Capers, mainly for coal cargoes, is sending rates even higher. EDF for 150,000 tons of cargo, loading Colombia October 1-15, discharging France, has fixed M/V «Formosa Bulk Energy» at USD 6.30 per ton with 50,000-ton load and 25,000 tons discharge.