The European Commission cleared a Greek plan to recapitalize banks through the Hellenic Financial Stability Fund on Friday.
The Fund has a capital of 10 billion euros and forms a part of the financial stability package reached with The International Monetary Fund and The European Union. Its aims at safeguarding “the financial stability of the credit institutions in Greece and thus the provision of credit to the national economy,” said Joaquin Almunia, commissioner in charge of competition policy.
The fund will provide equity capital to banks by acquiring preference shares.
In the case of preference shares, the scheme requires a remuneration of 10% of the shares to the fund and places restrictions on payment of dividends.
All banks benefitting from the fund will need to present a restructuring plan to the Commission.
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