OPINION

Chasm

The domestic banking system’s super-merger was close to falling apart even before its completion. The crisis in relations between the National Bank of Greece (NBG) and Alpha Bank surfaced on Monday, but problems had bedeviled the merger for many days beforehand. Even though the two boards avoided dwelling on the details, the root cause of the problem appears to be a deep division, not so much over ideas, as between the entrenched attitudes and operation of the country’s two major financial institutions. The fears and ambitions of the top officials who played a leading role in creating the current climate concentrated on this divide. In the case of takeovers, things are relatively easy. But the merger between a giant which essentially continues to be under state control and the largest private group in the same sector of the economy poses serious problems, given the difficulty of the osmosis. Although NBG has undoubtedly taken great leaps toward modernization over the previous years and has adopted broadly free-market criteria, it has still to shake off its bad habits. Its ideas, and above all its mentality and everyday practices, are completely different from Alpha’s, which has been structured in a completely different fashion. Alpha’s board decided to agree to the merger because in weighing up this inherent disadvantage and NBG’s great advantages, it concluded that it would be mutually beneficial. The crisis, however, proved that any such merger is more difficult than it originally seemed. But it would be a pity were such an ambitious venture to become mired in a narrow-minded approach. It appears most likely that this super-merger would be in tatters had it not been for strong pressure by the government. The government wants to see the formation of a Greek banking giant that can stand up to the strong competition within the eurozone. It also sees this merger as a way to complete the privatization of NBG, hoping it will prove a successful precedent that could function as a pilot model for the completion of the privatizations of other corporations in the rest of the public sector, such as Hellenic Petroleum. The crucial issue is to adapt the economy to the highly demanding conditions of the free market, which cannot come about with declarations on the adoption of free-market criteria. It requires a constant struggle against the bad habits of the past, which cannot be overcome without such mergers, without combining the size of state-controlled firms with the flexibility and efficiency of private institutions. According to his wife’s application to the court, Mr Adali «had received several death threats because of his articles and political opinions.»