“Negotiations between the Greek government and the troika over the future of the merger between National Bank of Greece and Eurobank Ergasias will likely lead to a compromise. Whatever the outcome, the model of local banks will have to change drastically to adapt to the country’s new economic reality.”
So wrote Kathemerini at the weekend. A regular Slog source based in Greece offers a slightly more pointed opinion:
‘Troika killed the NBG – Eurobank deal. Τhe merger agreement between the two banks, which had already substantially achieved , is CANCELLED.
The Germans want the two banks initially autonomous and under the control of the EFSF. Then they will activate plan B, which provides for the passage of the National Bank to Deutche Bank and the passage of Eurobank, which in the meantime will absorb and the Postal Savings Bank, to another German bank.
Berlin do not like a banking giant that would result from the merger of Bank-Eurobank, and which they could not control. It turns out that the last thing they are interested in is to restart the Greek economy and development, after the cancellation of the agreement that will cause new turmoil in the banking system.
Already many depositors in the last few days are either withdrawing funds or closing their accounts.
The most important thing is that Germany once again forced a showdown, frustrating a deal that was announced months ago and progressing normally. The message from Berlin is that Greece is now a German colony and protectorate, no business deal will not go ahead, no privatization will be stopped unless Berlin says so.
This means that the Germans finally get “the keys of the country”. The absolute control of the banking system, control of all economic activity, loans, deposits and even the control of the microeconomics. It also means the strangling of the minimum most healthy and developing Greek companies, leading these companies to fail – and forcing them into foreign hands.
In the meantime, a recapitalization of the banks could open the door for a haircut of the deposits…’
What does anyone else think?
The Slog 