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ATHENS, April 1 Greece will extend a deadline
for the recapitalisation of its banks by a few weeks, possibly
until the end of May, Greek central bank chief George
Provopoulos said on Monday.
Greek banks, which are being recapitalised with funds from
the country's latest EU/IMF bailout, have been lobbying for the
terms of the recapitalisation scheme to be sweetened and also
sought an extension to an end-April deadline for the plan.
"There will be a small extension of a few weeks, it may be
pushed to the end of May," Provopoulos told state TV.
The scheme aims to restore the solvency of the country's top
four lenders, National Bank, Alpha bank, Piraeus bank
Provopoulos confirmed that Greece's foreign lenders were
concerned about National Bank's takeover of Eurobank
Bankers told Reuters on Saturday that the lenders had raised
issues concerning the size of the merged entity relative to
Greece's gross domestic product (GDP) and the banking sector as
The combined NBG-Eurobank group would have assets of 170
billion euros, almost the size of Greece's 190 billion GDP and
36 percent of total deposits in the country's banks.
"They don't like the idea that such a big lender will be
created," Provopoulos said. "There is concern that if private
shareholders are not found, it will go under state control."
However, asked if the merger should be undone, he replied:
"No, it shouldn't."
Officials from the European Union, the European Central Bank
and the International Monetary Fund are due in Athens this week
to resume an inspection visit and talks on key issues, including
the bank recapilisation and public-sector layoffs.
Provopoulos reiterated that the Greek economy, which is in
its sixth year of recession, is expected to shrink 4.5 percent
this year - at the higher end of the targeted range - as the
Cypriot crisis was expected to lower GDP by 0.35 percentage
A European Union rescue package to save Cyprus from
bankruptcy imposed a hefty levy on deposits over 100,000 euros
in Cypriot banks, an unprecedented move that sent jitters across
the single currency euro zone.
Provopoulos said deposits in Greece were guaranteed. He
added that Greek banks saw deposit inflows in March in spite of
the crisis in Cyprus, and that more than 19 billion euros had
returned to Greece since mid-June.
"Even in March, which was a turbulent month due to the
developments in Cyprus, we had (deposit) inflows," he said.
(Reporting by Renee Maltezou and Harry Papachristou; Editing by
Deepa Babington and David Brunnstrom)