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European Commission

Press release

Brussels, 27 July 2012

State aid: Commission temporarily approves aid to Alpha Bank, EFG Eurobank, Piraeus Bank and National Bank of Greece; opens in-depth investigations

The European Commission has temporarily approved, under EU state aid rules, a bridge recapitalisation provided by the Hellenic Financial Stability Fund (HFSF) in favour of Alpha Bank, EFG Eurobank, Piraeus Bank and National Bank of Greece, for reasons of financial stability. At the same time, the Commission has opened four in-depth investigations to examine whether the measure is in line with its rules on state aid for banks during the crisis. The opening of an in-depth investigation is common for large amounts of state aid granted through atypical instruments. It gives interested third parties an occasion to submit comments on the measures and increases legal certainty for the beneficiaries. It does not prejudge in any way the outcome of the investigation.

Commission Vice President in charge of competition policy Joaquín Almunia said: "Greek banks are currently operating under extreme conditions. Their participation in the Greek Government bond exchange and the deep recession have weakened their capital. The bridge recapitalisation by the HFSF ensures the stability of the Greek banking system".

In April 2012, the HFSF committed to participate in the planned share capital increases of Alpha Bank, EFG Eurobank, Piraeus Bank and National Bank of Greece. On 28 May, the HFSF, in line with this commitment, granted the banks a bridge recapitalisation to cover the period until their final recapitalisation is implemented. More precisely, the HFSF deposited in the banks European Financial Stability Fund (EFSF) floating notes with maturities of six and ten years. The total amount received by the four banks is €18 billion. These deposits count as equity.

Greek banks have participated in the Greek Government bonds exchange, known as private sector involvement (PSI). The debt exchange resulted in very significant losses, depleting the capital base of the banks. The bridge recapitalisations have restored the banks' capital ratios to a level that allows their functioning on the market and access to euro-system operations. The measure aims to help the banks to comply with the national regulatory capital requirements of 8%. They constitute state aid because the banks would not have been able to raise the capital on the financial markets.


The four banks in question represent around three quarters of the Greek banking sector and have an important role in financing the real economy. Therefore, the Commission concluded that the measure was necessary to preserve financial stability in the Greek banking sector, in line with Article 107(3)(b) of the Treaty on the functioning of the European Union (TFEU). The Commission has approved the measure for six months or, if within that period, the Greek authorities submit a complete notification of the conversion of the bridge recapitalisation into a final recapitalisation, until the Commission reaches a final decision on this notification.

All four banks have benefited of state capital injections, guarantees and bond loans granted under the support measures put in place by Greece following the financial crisis and initially approved by the Commission on 19 November 2008 (see IP/08/1742). The capital injections took the form of preference shares and represented around 2% of each bank's risk weighted assets.

Since the Greek banks were expected to face substantial capital shortfalls as a result of the private sector involvement and the continuing recession, the Memorandum of Economic and Financial Policies of the Second Adjustment Programme for Greece between the Greek Government, the European Union, the International Monetary Fund and the European Central Bank of 11 March 2012 has made available funds for the banks' recapitalisation.

The (final) recapitalisation of the Greek banking sector has to be carried out in order for banks to comply with a 9% Core Tier 1 ratio by September 2012 and 10% by June 2013 as provided in the Memorandum.

The non-confidential version of the decisions will be made available under the case numbers SA.34823, SA.34824, SA.34825 and SA.34826 in the State aid Register on the competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

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