Greece’s biggest financial institution, the National Bank of Greece said it is going to eliminate 2,000 jobs, or about 15 percent its workforce to create savings needed by its acquisition of Eurobank, one of the country’s four largest lenders.
Beset by huge losses imposed by a previous government on Greek bondholders in a desperate attempt to reduce the country’s debt, and with more than 25 percent of Greeks defaulting on loans and credit cards because of pay cuts, tax hikes and slashed pensions, banks need a 50 billion euros ($66.6 billion) recapitalization. Many have already stopped lending.
The cuts will target employees that are close to retirement and will be carried out on a voluntary basis, the bank said. They will be completed by March and will only affect National Bank employees, said a bank executive who declined to be named, according to The Business Times. Last year the bank lost many of its most senior executives who left because of pay cuts.
National Bank offered in October to buy Eurobank to create the country’s biggest lender, part of the consolidation to help the banking industry cope with the fallout from the country’s crushing economic crisis.
Owed more than 250 million euros ($331.14 million) by Greek political parties who aren’t paying them, Greek banks are offering restructuring of loans and debt to some customers but others are hounding them for full repayment despite austerity measures that are eating up 46.5 percent of paychecks for most workers.
Eurobank especially has gained a reputation for relentless and aggressive customer collection, even from those who can’t pay, and has stepped up efforts to seize people’s homes for failure to pay mortgages. It also duns people to pay loans twice, even if they were paid off, if the customer didn’t request a letter of discharge. Promised government debt relief programs have never materialized as most of incoming international loans are going to banks.
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