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Economy

Divesting State Stakes in Big Banks Bringing Greece 3.5 Billion Euro Bonanza

ATHENS – The sell-off of state interests in five banks by the end of the year is expected to reap 3.5 billion euros ($3.8 billion) for Greece with Finance Minister Kostis Hatzidakis telling a parliamentary committee it will bring big benefits.

He said the New Democracy government is focused on “saving Greek deposits, as well as Greek businesses and households from a more comprehensive collapse and crisis,” although collection agencies are hounding those who can’t pay their loans.

Many fell into default during a 2010-18 economic crisis in which Greece got 326 billion euros ($353.84 billion) in three international bailouts to stave off collapse, the banks getting 50 billion euros ($54.27 billion) in rescue packages to stay afloat.

The divestment comes after the recovery of the investment grade, the high growth rates and the positive course of most of the main parameters of the economy,” he said, referring to Greece raised to the highest level by most agencies and attracting foreign investors.

Bank of Greece Governor Yannis Stournaras said the sales, with other revenues from the Hellenic Financial Stability Fund (HFSF) , would total about 53.7 billion euros ($58.29 billion.)

Earlier, Finance Minister Kostis Hatzidakis told Reuters that, “We had very significant interest expressed by many investors and that’s why we are aiming at finishing this process by the end of this year,” as Greece has rebounded.https://www.reuters.com/markets/europe/economy-rebounds-greece-will-wrap-up-bank-sales-this-year-finance-minister-says-2024-03-20/

The state recently sold its stake in three major banks, raising more than 2 billion euros ($2.17 billion), the latest sale of a 27 percent stake in Piraeus Bank, was oversubscribed eight times as investors jockeyed for position.

Under an agreement with creditors, Greece has until the end of 2025 to complete the sales but decided to move faster. Its remaining 18.4 percent participation in National Bank, the country’s largest lender, and 72 percent in the smaller Attica bank will be sold this year.

“We found that there was no reason to delay, to drag our feet,” said Hatzidakis as the banks have seen deposits return and raking in big profits after selling off bad loans to collection agencies hounding people to repay debts even if they can’t.

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