EU greenlights billion-euro Greek bank restructuring

The European Commission on Monday approved a billion-euro-plus plan to restructure the Agricultural Bank of Greece (ATE) using state finance propped up by an international bailout. The European Union's executive arm said it judged it "apt to restore the (ATE) bank's long-term viability whilst ensuring it shares the burden of its restructuring and limits the distortions of competition." The plan involves a Greek state recapitalisation of the bank of up to 1.14 billion euros plus liquidity measures, with the bank in return committing "to reduce it its overall assets by 25 percent during the restructuring period and to improve its efficiency." The restructuring is "a positive result of our participation in the international macro-financial assistance programme for Greece," said EU competition commissioner Joaquin Almunia in a statement, referring to the 110-billion-euro EU and IMF bailout started last May. The decision comes as EU partners pave the way for what they have called a "soft" restructuring of more than 330 billion euros of Greek sovereign debt, on condition that banks also agree to extend existing repayment schedules.