The European Union (EU) financial regulators have approved the restructuring of two Greek banks, saying it is in line with EU state aid rules.
The EU said that government support extended to National Bank of Greece (NBG) and Piraeus Bank during the financial crisis didn’t breach EU competition rules; instead they enabled them to fully restore long term viability, while limiting the distortions of competition brought about by state aid.
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European Commission vice president in charge of competition policy Joaquín Almunia said: "Through the restructuring plan, NBG will focus its activities on the strong Greek and Turkish banking operations and improve their efficiency. This will ensure that the bank can continue financing the Greek economy on a sustainable basis."
Since the outburst of financial crisis in 2008, Greece and the Hellenic Financial Stability Fund (HFSF) have granted repeated capital and liquidity support to NBG and Piraeus Bank.
This state funding forced the European Commission to launch a probe to check whether the aid provided the banks an unfair advantage over rivals.
The Commission noted that NBG has already started to implement significant rationalization measures such as a voluntary staff retirement scheme, salary cuts, branch closures and further cost cutting initiatives in Greece and South Eastern Europe.
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By GlobalDataIt also praised Piraeus Bank for acquiring and integrating several faltering Greek lenders within a very short time.
