Agony about the Agricultural Bank and the Hellenic Post Bank

The cabinet is called upon to make the decisions that will unblock bank recapitalization so that banks can manage to publish their balance sheets by Friday, which is the expiry date. Otherwise they will need an extension, resulting in maintaining a serious open issue with chances of complications.

According to information, the cabinet is expected to meet on Wednesday or Thursday to ratify two more decisions to recapitalize the banks. These will reduce the funds required by the banks - thus they will not be added to the debt - by 12 to 13 billion euros.

The bonds worth 25 billion euros which are the first tranche of funds provided for the recapitalization of Greek banks will be credited to the Financial Stability Fund by Friday.

The upcoming decisions of the cabinet will determine all outstanding issues for the recapitalization and adjustment of deferred taxes, i.e. the ability of banks to offset losses from the bond haircut with tax profits in subsequent years. If these regulations do not go through, banks will have to receive another postponement in the publication of their balance sheets.

After the haircut the banks no longer have the required capital and if they publish their balance sheets without the procedure for reinforcing their capital they will have to be identified by the auditors, a likelihood that will have a range of consequences from trading their shares in the ASE to supervisory issues with the Bank of Greece.

Meanwhile, there is also agony about decisions to be made about the future of the Agricultural Bank and the Hellenic Post Bank. The reason is that they are state banks and under the memorandum they cannot receive money from the package for the recapitalization of banks and the State does not have adequate funds to reinforce them. A negotiation is in progress in an attempt to have specific arrangements.

The European Central Bank has confirmed that whatever the solution decided upon, it will come in a smooth manner without causing problems to the Greek economy and by extension to the customers and depositors of the aforementioned banks.