One step forward, two steps back

19 November 2010 By Nicholas Paisner

The swelling of the euro zone crisis has shut Greek banks out of the capital markets again, just as they were making a tentative return. So long as investors fear Greece may renege on its obligations, its banks will struggle to achieve rehabilitation.

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Greece's finance minister said on Nov. 18 that the country's banks were overcoming their problems, successfully raising capital and opening interbank credit lines.

Eurostat, the European Union's statistics agency, said on Nov. 15 that it had revised Greece's 2009 budget deficit for a third time, to 15.4 percent of gross domestic product compared with a previous estimate of 13.6 percent.

National Bank of Greece and EFG Eurobank said on Nov. 9 that they had agreed repo lines of 4 to 5 billion euros with foreign banks. NBG said that the "development marks an important step in the efforts of the Greek banking system to gradually regain access to the international money markets."

EFG said on Oct. 18 that it had concluded a 300 million euro, twoyear repo agreement using Greek government bonds as collateral.

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