The EC approved the allocation of 2.7 billion euros to recapitalize the Bank of Greece

The EC approved the allocation of 2.7 billion euros to recapitalize the Bank of Greece


On the third program of aid Athens will receive 25 billion euros to recapitalize the four systemic banks. The European Commission approved tranche in the amount of 2.72 billion euros for Piraeus Bank Bank.

ATHENS, 29 Nov. The European Commission in the framework of the plan of recapitalization of the banking system of Greece has approved tranche in the amount of 2.72 billion euros for the Greek Bank Piraeus Bank, one of the four systemic banks in the country, according to a statement on the website of the European Commission.

On “adverse” scenario of the stress test the Bank’s capital deficit was estimated at 4,93 billion euros. The Bank was able to get to 1.94 billion euros by attracting private capital, the Supervisory authorities also adopted additional capital to 271 million euros. In accordance with the comprehensive assessment of the Single Supervisory mechanism (SMM) to the end of the year Piraeus will miss 2,72 billion, this deficit will be covered by the Greek government for the funds received in the framework of the third programme of assistance.

“I welcome the fact that the Bank of Piraeus has covered a substantial portion of the capital deficit at the expense of private investors. It is a sign of market confidence. Additional state funding and the execution of the restructuring plan should allow the Bank to restore stability for the long term and continue to contribute to the recovery of the Greek economy”, — quotes the website of the statement of the European Commissioner for competition Margaret Vestager.

According to the Memorandum between Greece and international lenders, by the third aid programme, Greece will receive EUR 86 billion. 25 billion was planned to recapitalize the four systemic banks. The European Central Bank conducted stress tests. In the baseline scenario of the stress tests show capital deficit of 4.4 billion euros in the four systemic banks. On “adverse” scenario, the deficit is 14.4 billion euros. A significant portion of these funds was covered through additional placement of bonds.