National Bank of Greece escapes nationalization | Business| Economy and finance news from a German perspective | DW | 14.06.2013
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National Bank of Greece escapes nationalization

The biggest lender in debt-stricken Greece, the National Bank NGB, has announced that it raised the necessary amount of private capital to avoid nationalization. It secured even more money than required by law.

The National Bank of Greece confirmed Friday that it had raised sufficient money from private investors to meet the country's recapitalization rules.

"The minimum participation of the private sector in capital increase, as set by law, has been achieved," NGB announced in a statement. Greek newspapers reported that the country's biggest lender had raised a total of 1.17 billion euros ($1.56 billion), way above the 800 million euros required to stay private.

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Greece's administrative reform

NGB is thus the second of the four main Greek lenders to escape nationalization. Earlier in June, Alpha Bank announced that it had attracted enough private investment to avoid coming under state control.

Watchful creditors

The DPA news agency reported that Piräus Bank was also likely to meet recapitalization targets until the end of the month. Things looked worse with Eurobank which had not been able to raise enough and had to turn for help to the national stability and rescue fund.

Ailing Greek lenders have also been able to fall back on a 50-billion-euro rescue loan from the EU and the International Monetary Fund, which earmarked the money to cushion the impact of banking losses incurred through write-downs on privately held government bonds.

EU, IMF and ECB auditors are currently in Greece to continue monitoring cost-cutting endeavors. Thousands of civil servants are losing their jobs to make the public sector leaner in line with the creditors' demands and in return for a continuation of the bailout program.

hg/mkg (dpa, AFP)

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