00:39 GMT25 November 2020
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    The European Stability Mechanism (ESM) decided to release €2.72 billion to Greece to recapitalize Piraeus Bank, according to the ESM press release.

    BRUSSELS (Sputnik) — Greece's Piraeus Bank has been allocated 2.72 billion euros ($2.88 billion dollars at the current exchange rates) by the European Stability Mechanism (ESM) as a part of its assistance program to cover recapitalization costs, the ESM said Tuesday.

    "The Board of Directors of the ESM decided today to release €2.72 billion to Greece to recapitalize Piraeus Bank. This amount will be subtracted from the €10 billion held in a segregated account at the ESM and designated to cover the Greek banking sector’s potential resolution and recapitalisation costs," the ESM said in a statement published on its website.

    With an identified shortfall of 4.93 billion euros, Piraeus has covered the remaining 2.2 billion partly by private means, and in part by additional capital operations. The remaining 7.28 billion euros will be used for the further recapitalization of Greece's banks, it was noted in the statement.

    A piggybank painted in the colours of the Greek flag stands amongst various euro coins in front of letters spelling the word 'GREECE' in this picture illustration taken in Berlin, Germany June 30, 2015
    © REUTERS / Pawel Kopczynski
    "Future releases of funds will be decided on a case-by-case basis," the ESM statement continued.

    In late October, the European Central Bank identified a 4.4 billion euro baseline and 14.4 billion euro adverse scenario shortfall among Greece's four main banks. The banks' recapitalization process started after Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank submitted their plans on November 6.


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