Greek austerity win win for banksters

The plan developed by the Greek government and its international creditors to recapitalize the country’s banks involves an unusual twist as stock offerings go: the new shares in the banks will give investors free and potentially lucrative warrants that will entitle them to buy many more shares in the future at a predetermined price. http://www.nytimes.com/2013/06/26/business/global/greek-bank-bailout-plan-may-reward-some-involved-in-collapse.html?ref=world  Because many of the investors who are expected to participate in the stock program are the same executives who were running the banks at the time of their near collapse, critics see it as a case of bankers being rewarded despite their management missteps. And they say the Greek government is forgoing billions of euros in potential revenue with the way the stock offering is being handled. “All you are doing is rewarding bad behavior,”
financial experts contend that the inclusion of free warrants will not only reward well-connected insiders but will also deprive Greece’s government of billions of euros in public revenue — money that might have been raised if the stock warrants were auctioned off, rather than simply given away.
Piraeus Bank, National Bank of Greece and Alpha Bank have already succeeded in raising about 2.9 billion euros of this amount, thus ensuring that they will not be nationalized. The rest of the money will be supplied by European taxpayers, funneled through the Hellenic Financial Stability Fund, the Greek body overseeing the program.“Who is going to pay for this? The Greek taxpayer, of course.”
“We know the authorities wanted ownership of the Greek banks to move quickly to the private sector, but the sweetener they have used — free warrants — is very expensive and will result in forgone income for the Greek state.”
To date, of the 206 billion euros, or $270 billion, that the troika has dispensed to bail out Greece, an estimated 58 billion euros — all of which comes from European taxpayers — has been spent propping up the country’s banks.
The potential beneficiaries appear largely to be bank insiders, whose personal wealth is often already tied up in the institutions.

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