EU says Greece must recapitalise banks by end of 2015

Greece along with its international lends must recapitalise four of its banks by end of 2015, act fast to finalise assessment, its bailout reforms, EU commissioner says

Photo by: Reuters (Archive)
Photo by: Reuters (Archive)

EU Commissioner Valdis Dombrovskis speaks at a news conference at the EC headquarters in Brussels

Updated Oct 28, 2015

The recapitalisation of Greece's four main banks needs to be completed by the end of 2015, as planned in the country's latest international bailout loan, the European commissioner in charge of the euro said Tuesday.

"We all agree that it is important to finalise a bank recapitalisation by the end of this year," said Valdis Dombrovskis after meeting with Greece's Central Bank Governor, Yannis Stournaras.

A draft law is expected to be introduced in the Greek parliament this week, setting the rules for recapitalisation, the third since Greece's debt crisis erupted in 2010.

The recapitalisation was anticipated in the accord for a new 86-billion-euro bailout reached in July between Athens, its eurozone partners and the International Monetary Fund.

The accord planned for 25 billion euros to bail out the banks which faced a major flight of capital over the past year during the negotiations for a new loan.

The four banks are the National Bank of Greece, Piraeus, Alpha and Eurobank.

Dombrovskis also said that refloating the banks would depend on an evaluation of how the rigorous measures demanded by the creditors are being implemented as well as the results of stress tests which will be published soon by the European Central Bank.

On the first day of his visit Monday, he met with Prime Minister Alexis Tsipras and Finance Chief Euclid Tsakalotos, as well as other ministers.

"This was a good occasion to look on how Greece is promoting innovation... bringing together the academic community and the business community to work on new projects, to develop new ideas and eventually to facilitate job creation here in Greece," said Dombrovskis, who is also the Commission's vice president.

Athens meanwhile is looking to receive by the end of the month a tranche of two billion euros of the new loan.