“junk” status by the Fitch rating agency (Moody’s
and S&P had already downgraded Greek debt).
Because at the same time —something that is not
so widely known— many bank bonds, which were
being used as collateral for drawing liquidity from
the ECB, where also “knocked out” of the game.
Their total amount is estimated at €8 billion.
And although this amount has been covered by a
new set of government guarantees, amounting to
€25 billion, the damage has been done.
Moreover, the fact that neither of the other two
rating agencies has yet shown its hand, since
their reports are still anticipated (they were, at
least, anticipated at the time of writing), is obvi-
ously causing further concern.
In order to alleviate these concerns or, better still,
to be proactive, the bankers are taking action
themselves. In a unique show of unity, a road-
show was organized in London, in late January,
with the participation of the chief economists of all
major Greek credit groups. They met with S&P
executives in an effort to change their minds. In
other words, they tried to show them that the
Greek economy does, indeed, have a future and
prospects, and that, sooner or later, it will come
out of the tunnel it has entered. The aim? To avoid
a new condemning report for Greece that might
cause immeasurable damage.
It should be noted that similar initiatives have
been taken by the Minister of Finance, George
Papakonstantinou, who, for the same purpose,
took part in a conference call with Moody’s exec-
utives. Evidently, many other such presentations
will be held during 2011, always with the same
target. After all, everything shows that this effort
has just started and —at least as far as the banks
are concerned— it will be two-pronged. On one
hand the banks will aim at reversing the
unfavourable sentiment prevailing in Greece and
abroad in regard to the country’s fiscal condition,
and on the other hand they will try to put their own
house in order. An equally challenging task.
Which is, nonetheless, already underway.
In this context, the National Bank of Greece has
decided to sell 20% of its stake in its Turkish sub-
sidiary, Finansbank. This procedure is expected
to be completed by late February, since the
impediments cause by red tape and other techni-
cal issues were more than originally anticipated.
NBG expects savings of more than €1 bn from
this deal, which will be carried out by means of a
public offering, since the aim is to ensure the high-
est possible dispersion of the stake. Half of this
amount will be reinvested in Turkey, in order to
ensure Finansbank’s independence in dealing with
capital markets, while the other half will be repatri-
ated, as part of amortizing the largest Greek invest-
ment ever made in the Turkish market.
The same is, more or less, the case with
Trade with Greece
59
A shock that is equiva-
lent to the great surprise
caused by the fact that,
during the first year of the
crisis - which, admittedly, is
expected to prove much
milder than the next ones-
Greeks withdrew savings of
almost
€
10 bn to cover cur-
rent liabilities.
”
“
