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10 March 2014

Eurogroup urges Greece and Troika to conclude review this week


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Eurogroup chief Dijsselbloem stressed the need for Greece and the Troika to conclude the review, which has dragged on for more than 170 days. "It is important for us, and especially for Greece, that the Troika and the Greek government arrive at an agreement very soon", he said prior to the meeting.


In his statement after the Eurogroup meeting, Dijsselbloem said:

"We took note of the progress made since the return of the Troika to Athens two weeks ago. However further work is needed on several fronts before the review can be closed. But as I understand it from the institutions that progress has been made and we can be slightly optimistic that a result will come out over the course of this week. We called on Greece to do its utmost from their side so that the review can be concluded rapidly.

We also took note of the results of the supervisory stress test and asset quality review of the six Greek banks and the ensuing estimates for the banks' recapitalisation needs. We expect that the necessary capital is now injected swiftly into all the banks and is raised first and foremost from private investors. We welcomed that two banks have announced recapitalisation plans going beyond the requirement stemming from the test."

In Athens, government sources revealed that Greece is under pressure from the troika to submit to Parliament a new legal framework governing the recapitalisation of Greek banks. The new law would allow the bank recap fund, the Hellenic Financial Stability Fund (HFSF), to sell shares it has acquired in Greek lenders at a lower price than had been initially planned.

The HFSF argues that it will make up any shortfall because the remainder of the bank shares it holds will increase in value if Greece’s four systemic banks – Piraeus, National, Alpha and Eurobank – are recapitalised with private funds, particularly if they come from abroad. Opposition parties, however, are certain to oppose such legislation. SYRIZA has said it is against a move to sell bank shares at lower prices. Yesterday, the leftist party also said it would publicly question the stress test results published by the Bank of Greece last week, which put Greek banks’ total capital needs at €6.4 billion.

Full article © Kathimerini


Speaking at the press conference, VP Rehn said: "We have discussed the state of negotiations in the context of the current review mission, which is still ongoing in Athens. The talks are moving forward in a constructive atmosphere but there remain a number of differences to be overcome in order to reach an overall agreement. Our staff continue to work very hard to reach an agreement with the Greek authorities which could form the basis for a successful conclusion of the review."

Full speech © European Commission


Fitch Ratings says there is no impact on Eurobank Ergasias SA's (Eurobank; B-/Stable/B) €2.2 billion mortgage covered bonds' 'B'/Negative rating following recent amendments to the liability structure. The breakeven asset percentage (AP) for the 'B' rating remains 95 per cent. The Negative Outlook reflects the deteriorating asset performance and adverse operating environment for Greek banks.

Press release, 14.3.14





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