The failed merger of National Bank of Greece and Alpha Bank has been followed by great noise and a political earthquake. This is only justifiable for those within the political world. For the rest, especially those working in the private sector, the development is not strange. Most mergers announced abroad never came to fruition, because such undertakings are fraught with difficulties recognizable only after in-depth research. Many times, multinationals have abandoned heralded merger plans after they saw they would not produce the expected results or create the necessary economies of scale. In the case of the two largest Greek banks, the difficulties were evident as the two competing banks’ activities overlapped and had many branches near each other. Those in the know understood that for the merger to work, National Bank governor Theodoros Karatzas and Alpha Chairman Yiannis Costopoulos would have to fire thousands of employees and close hundreds of branches, something which was not in keeping with accepted labor practices or the norms of Greek society. In that sense the effort was undermined from the start, even though the vision of the two governors seemed attractive. That said, the exchange of accusations between the government and the opposition cannot be judged on economic criteria but on political ones alone. Our politicians treat the merger as a political rather than economic act, forgetting even the recent law that was widely hailed as the liberation of NBG’s governor from the bonds of dependence on the State, as now the boards of the bank will be appointed by the general assembly on the proposal of the governing board. They insist, in other words, on treating the National Bank as a wholly state-run entity. This shows how deep-rooted this mentality of state control is, that politicians immediately fall back on it at critical times. But the time has come for this mentality to change. The paeans to the free market must transcend our politicians’ skins and become their manifestos – if, that is, they want to help the country fight for survival in the eurozone’s competitive environment. So let the economy do its work on the basis of modern principles, avoiding both state intervention and the continual reproduction of statist ideology for the sake of short-term political gain. That would do the country a far more substantial and lasting service.

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