Politicians feed off bank merger failure

The government yesterday did its best to distance itself from the failed merger of the National Bank of Greece and Alpha Bank, the country’s largest state-controlled and private bank, respectively. The opposition, however, did its best to tie the issue to the government, keeping up the calls for the dismissal of National Bank governor Theodoros Karatzas. Prime Minister Costas Simitis, in his first comment on the issue, made an indirect reference to his government’s policy while inaugurating National Bank’s new administrative headquarters in central Athens. «The government welcomes and encourages business restructuring. But it does not order them nor direct them,» Simitis said. His government had welcomed the merger’s announcement on October 31, saying that this would help Greece have a stronger presence in the highly competitive environment of the eurozone. «It is up to the businesses themselves to take the necessary initiatives at the appropriate time and carry them out with credibility, vision and conscientiousness. Not on the basis of the inertia of the past and the maintenance of outdated mentalities, but with boldness and determination,» he added. «Only in this way can we strengthen our national competitiveness, promote employment and lay the foundations for the prosperity of a strong Greece.» Karatzas briefly referred to the failed undertaking, saying that the planned merger confirmed «National Bank’s leadership and adaptation to the new challenges. This effort, unfortunately did not bear fruit. This does not discourage us. We will continue systematically and consistently.» The conservative opposition, New Democracy, which had met the merger announcement warily, charged that the government wanted to strengthen the oligopoly in the banking sector and increase the presence of the state in the country’s largest financial institution. The merger, which would have been worth 10 billion euros, was called off on Saturday in a phone call from Karatzas to Costopoulos when their deputies failed to reach agreement on the distribution of top management positions in the new bank, which was to be called National Bank of Greece, with the use of Alpha’s logo. The two banks’ employees’ unions did much of the sparring for senior management in the previous days. New Democracy’s spokeswoman for foreign affairs, Dora Bakoyianni, said that the issue showed «the continual policy deficit and malfunctioning within the government.»

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.