• Greek bank stocks battered as bailout talks grind on

    0

    ATHENS: Greek bank shares on Tuesday (Wednesday in Manila) took a battering for a second straight day, but Finance Minister Euclid Tsakalotos insisted Athens and its creditors could reach a deal on a mammoth new bailout in time for a huge debt payment due this month.

    The ATHEX index finished the day down 1.22 percent after suffering its steepest ever fall of 16.32 percent on Monday when trading resumed after a five-week shutdown imposed amid the country’s debt crisis.

    Banking shares were again the worst hit, with Piraeus falling the maximum 30 percent allowed for the second day running. Eurobank shares fell 29.70 percent, those in Alpha Bank by 29.65 percent and National Bank by 28.45 percent.

    “Banking shares are the ones we have the most doubts about,” said Konstantinos Botopoulos, head of the Greek financial markets commission. “Their recovery will depend on the recapitalization of the banks.”

    The Athens market reopened on Monday five weeks after the government imposed capital controls to prevent a bank run and stave off financial collapse at the height of its standoff with EU-IMF creditors over a new bailout.

    Tsakalotos on Tuesday expressed confidence that debt-crippled Greece and its creditors will reach a deal on a new rescue package in time for August 20, when it is due to pay the European Central Bank 3.4 billion euros ($3.71 billion).

    If the deal has not been finalized by then, Athens will be forced to seek emergency aid to pay the debt.

    Tsakalotos told journalists the high-stakes talks were going “at least as well as we expected,” and that the possibility of an emergency loan for the ECB payment has not figured in the discussions.

    The plunge in Greek banking shares highlights investors’ continuing anxiety about the nation’s stricken economy even after a new international bailout deal worth up to 86 billion euros ($94 billion) over three years was agreed in principle last month.

    Senior EU and IMF auditors kicked off talks a week ago with Greek ministers to finalize the terms of the new bailout decided after months of acrimonious wrangling.

    Analyst Michael Hewson of CMC Markets UK predicted that the new bailout will have to be “well above the 86 billion euro numbers being bandied about, which in turn is likely to make any discussions about debt relief even more contentious.”

    Government spokeswoman Olga Gerovassili said initial talks finished on Tuesday and would shift Wednesday to a “second phase” in which the two sides would begin actually drafting the accord.

    AFP

    Share.
    loading...
    Loading...

    Please follow our commenting guidelines.

    Comments are closed.