National Bank of Greece (ADR) (NYSE:NBG) has been undergoing economic reforms, in an effort to save the debt ridden banking sector of the country. Recently, international creditors of the bank, at the Riga meeting, criticized Greece for not speeding up its economic reforms. The Syriza government had been responsible to restructuring the country’s debts, but so far has failed to show significant progress.
The ECB has, however, granted further liquidity assistance to the bank, with a permission to tap into more funding. The move had been taken as a sign of improvement in the economy. So far, the funding bar, to Greek banks, has been raised to $78 billion. The EU has also been pressurizing the country to make economic reforms, with special emphasis on the corrupt tax system of the country. Additionally, the government has also been asked to increase revenues in state run companies.
Until now, the poor economic policies have been blamed for the downfall of banks like NBG. However, the negotiations with respect to these reforms has taken a long time, with the EU officials pointing out that it makes a swift change very difficult to achieve. However, despite the pressure and efforts from the EU, the Riga meeting saw the country still moving towards a default. The Austrian finance minister, Hans Joerg Schelling, expressed his annoyance after the meeting, stating that “the talks cannot continue like this”. This just shows that the EU is running out of patience and the banking sector might just loose this final opportunity.
The recent developments have shown that the Eurozone is losing trust in the government and the country can be seen going out of the EU. However, the exit would not affect Greece alone; it would be pulling down several weak EU economies with it. Greece and its banking sector have been given time till June for recovery.
National Bank of Greece (ADR) (NYSE:NBG) closed at $1.46 after gaining 5.04% on April 30. The bank has 3.53 billion shares being traded in the market, with a 52-week range of $0.98-$4.16.
