The FINANCIAL — Greece's government will present a final plan to recapitalize the country's banks April 10, a local newspaper reports Monday, adding that many of the details have yet to be decided.
Without citing sources, financial daily Imerisia reports that the banks have made proposals to the government on how to proceed with the recapitalization and are expecting the government's response later this week.
According to Borsa Italiana – London Stock Exchange Group, in March, Greece completed much of a planned EUR206 billion debt restructuring aimed at cutting the stock of debt it owes private creditors in half, thereby lowering the country's ratio of debt to gross domestic product to a more sustainable 120.5% by 2020, down from about 165% currently.
The debt write-down is part and parcel of a new EUR130 billion bailout for Greece agreed to by its European partners and the International Monetary Fund earlier in March.
But the debt write-down also left huge holes in the balance sheets of Greek banks who will now need an estimated EUR32 billion or more to recapitalize and will have to seek state support to do so. A separate, independent audit of Greece's banking system completed late last year, but not yet made public, shows that the banks are also facing huge write-downs for rising non-performing loans and will have set aside further provisions–or ask for more official help–to cover those losses too.
Discussion about this post