European officials have revealed that some large banks may face closure and be forced to merge with rival banks as part of a massive restructure.
Four leading banks – National Bank of Greece, Eurobank, Piraeus and Alpha Bank – could potentially be reduced to two.
An EU official, who preferred to remain unnamed, told Reuters that “the Greek economy is in ruins. That means the banks need a restart”, adding that Cyprus could be a role model.
He emphasised that if a bailout agreement is reached, prompt action is vital.
“You have a tiny bit of time … you would do restructuring straight away,” he said.
Following the prime minister’s promise to “restore our banking system’s functioning” however, it is expected that if such plans go ahead it will not doubt be faced with fierce resistance in Athens.
Though merging banks would successfully save much needed funds in the long term, the resulting job cuts from the banking sector will no doubt be unfavourable.
Reports reassure that customer’s don’t have anything to worry about regarding their deposits, which would simply be transferred to the bank’s new owner.
With banks still closed and expected to run out of cash soon, Sunday’s meeting couldn’t come sooner for the people of Greece.
Source: Reuters, The Herald Sun