Greece – Rumours Of A Cyprus-Type Bank Holiday Grow On News Of Blocked Merger

The merger of two of Greece’s biggest banks has been put on hold leading to huge losses in the share price of the respective banks. With this news, rumours among the Greek population are growing that Greece will experience a Cyrus style bank holiday until this situation is resolved.

Merger of two of Greece’s biggest banks blocked probably by Germany and out of the blue German war repatriations hit the headlines

The Greek central bank governor has already stated that he wants Eurobank and the National Bank of Greece to merge.

The Telegraph alleges that the deal is being blocked by the European Union, International Monetary Fund and European Central Bank.

Given that the Greek Central Bank has been singing from the same hymn sheet as these other institutions for as long as anyone can remember it is hard to imagine any disagreement.

However the Bundesbank is a thorn in the side of the ECB board (if you want evidence of this, simply Google “bundesbank dissent ecb” for countless examples of friction between the ECB board and the Bundesbank), the only logical conclusion is that it is the ECB and specifically the Bundesbank that is putting the brakes on this merger.

The motives for blocking the merger are sound.  The merger would result in a bank controlling 40% of the Greek banking industry. It would be impossible to imagine any government being able to stand up to a business with that much control of the economy.

Blocking the merger is also sound as it was the issue of too big to fail that put Greek taxpayers on the hook for bank losses. To create a bank of this size defies all logic.

And for these reasons Greeks are talking about a Cyprus like bank holiday in Greece.

The ECB has shown it is not prepared to take no for an answer. The forced merger of the two biggest banks in Cyprus is almost a carbon copy of what we are seeing now between the National Bank Of Greece and Eurobank.

If the resistance to the merger does not disappear you have to assume that there will be a bank holiday to force the dissenting party to agree.

And by sheer coincidence, with merger being put on hold, out of the blue the issue of German war repatriations has suddenly and unexpectedly been pushed to the top of the news agenda in Greece.

If you were a cynic you would say the timing is a little too convenient.

You have the Bundesbank more than likely being the party that is putting a huge spanner into the works by blocking the National Bank Of Greece merger and as soon as this is announced you have a headline news story which further poisons the minds of Greeks against Germany.

This story on its own is bad enough in distracting people from the real problems in Greece.

Imagine the talk of unpaid war repatriations going on in an environment where banks are closed indefinitely. And a bank holiday that Greeks are told could be resolved if Germany simply coughed up what it owed from WW2. This creates  a situation where powerful emotions rule the day and logical thought is forgotten.

Like I said, you could say it is sheer coincidence that the issue of the war is being brought into a situation where Germans are probably blocking the plans of the international banking cartel but I am a little more cynical.

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