Greek banks get $23 billion from bailout

24 May 2012, 7:34 am   -   Source: AAP
(AAP)

(AAP)

Four leading Greek banks will receive a $23 billion capital injection to boost their liquidity levels, a key element of Greece's second bailout deal.

Four of Greece's leading banks are to receive an 18-billion-euro ($A23.4 billion) capital injection to replenish reserves which were hit by the country's massive debt restructuring deal.

The country's Financial Stability Fund said on Wednesday it had approved the funds' release to banks.

The 18 billion euros will be split between the National Bank of Greece, Eurobank, Alpha Bank and Bank of Piraeus as part of a 50-billion-euro recapitalisation plan to boost their liquidity levels and keep them in business.

That recapitalisation plan is a key element of the second, 130-billion-euro bailout agreement Greece negotiated with the European Union and the International Monetary Fund in March to stay solvent.

Greek banks suffered massive losses following a writedown of their Greek government bond holdings this year.

On top of the writedowns, Greek banks have also been hit by customers withdrawing their euro-denominated savings as they hedge against the country's possible forced exit from the single currency and a return to its old devalued currency, the drachma.

The Athens Exchange continued its losing streak on Wednesday, closing down 1.79 per cent at 526.39, a 22-year-low.

Meanwhile, pharmacies across Greece staged a daylong strike to protest what they say are half a billion euros of unpaid dues from the country's largest health care provider.

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