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Samaras Wants Troika To Back Bank Merger

NBGPrime Minister Antonis Samaras is planning to go head-to-head on April 7 with envoys from international lenders who are in Athens checking progress on reforms before releasing a 2.8 billion euros ($3.5 billion) overdue installment and will push them to agree to a merger of the National Bank and Eurobank, which would create the country’s largest lender.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) hadn’t sought to stop the banks from coming together but now opposes the deal that’s in its last stages, fearing its combined assets would be too large compared to the country’s Gross Domestic Product (GDP) and be a problem if the banks get into trouble, as happened on Cyprus.
The merger is coinciding with planned bank recapitalization and was the focus of initial talks between the Troika and government representatives, led by Finance Minister Yiannis Stournaras. The IMF representative insisted that the National-Eurobank tie-up would come with risky consequences for the public debt, the newspaper Kathimerini reported.
That concern was confirmed by European Commission spokesman Olivier Bailly in Brussels, who stressed that the Troika is not vetoing the merger, as press reports in Greece have suggested, but that there is skepticism regarding its impact on the fiscal figures.
He added that, “In the case of a country like Greece, which is involved in an economic adjustment program, when it comes to mergers, the Commission will not only examine issues related to market competitiveness but also how the merger in question will influence the debt burden and the deficit of that country, particularly when the state increases its participation in the shareholder composition.”
According to the Troika’s revised calculations, the two banks’ needs in the recapitalization will reach up to 17 billion euros ($21.9 billion) after a merger, from 15 billion euros ($19.38 bilion) because of a dispute over some of the figures involved.
A high-ranking Finance Ministry official told the newspaper that Troika “cannot veto the deal, it is they who are putting the money in. They want to be assured of the synergies and that they will not want to provide any more money for the recapitalization.”

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