By Dimitris Kontogiannis
The Greek government has invested a lot in the long-awaited bailout
tranches to cope with the developing credit crunch and bring the economy
to the stabilization phase late next year. However, a closer look at
the figures indicates the positive impact may be less than hoped for,
and therefore the risk of disappointment on the back of fostering high
expectations should not be ignored or underestimated.
The two largest banks in crisis-stricken Greece need a total of €13bn
($17.2bn) to recapitalize, as they took huge losses in the country’s
debt restructuring.
Greece’s second largest bank by assets, Eurobank, needs €5.8bn, with
the fourth largest lender Piraeus Bank being short of €7.3bn, according
to the Wall Street Journal. In the first 9 months of the year the two
banks reported combined losses of €1.7bn, with a huge part of that due
the banks’ participation in the country’s debt restructuring programme.
The
four biggest banks in Greece were left technically insolvent, after
they joined the €200bn debt restructuring programme. It left them
dependent on extremely expensive loans from euro zone member states and
the International Monetary Fund.