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German media: Rescuing Greek banks at taxpayer costs?

The German press reports on the plans of the Greek government to support the banking sector. Among other things, there is talk of taxpayers being able to bear burdens in Greece.

The German press reports on the strong pressures on the Athens Stock Exchange for the shares of the Greek banking sector.

FAZ: Bad Bank Plans

"Uprisings in Greece - a Bad Bank under discussion," Frankfurter Allgemeine Zeitung comments in the report.

The Frankfurt newspaper notes, among other things, that "a large portion of bank shares lost up to 20% of their value in one day (on Wednesday). The collapse in stock prices led to a hasty move by the left-wing government under Alexis Tsipras. It was said in Athens that the Cabinet works together with the ESM and the Greek Banking Association on an "action plan" to lighten banks out of high-risk loans. Details were not known in the first instance. [...] Now we are talking about a Bad Bank in which the banks' red loans could be gathered. "

According to FAZ, "for this purpose, a portion of the 24.1 billion-euro liquidity pillow that the eurozone finance ministers had agreed in the summer could be used as financial collateral. In Brussels, ESM's participation in these projects has been neglected, the Frankfurt daily reports, accusing the government of the large volume of non-performing loans. "The Tsipras government has repeatedly hampered and delayed sales of loans or foreclosures of property belonging to inconsistent mortgage recipients."

Die Welt: Tsipras felt fear

"Investors are worried about Greek banks," Die Welt writes in the electronic version of the issue. The report says that "losses were becoming increasingly threatening in size," on Wednesday at the Athens Stock Exchange. "Prime Minister Alexis Tsipras obviously feared and reacted directly. Now a rescue (of banks) seems to be close - but possibly at the expense of taxpayers," the Berlin newspaper points out in connection with the banking sector support plan being considered by the Greek government.

The German newspaper explains inter alia that "toxic loans should be secured. This would be possible if a Bad Bank were selling bonds to investors, some of which would receive state guarantees. The potential losses would be shouldered by taxpayers in this case."

Handelsblatt: Politically, the turmoil for Tsipras is extremely worrisome

Handelsblatt refers in its report to a "help plan for the banks of Greece". According to the Dusseldorf financial newspaper, the flight of investors from bank stocks has two main reasons: the risk stemming from the large volume of red loans and concerns about the reduced profitability of Greek banks, as reflected in quarter data published at the end of August.

"The Greek government has not yet officially confirmed" the way banks are supported, says Handelsblatt, but the paper estimates that "the plan is similar to the model Italy agreed with the EU in 2016 for the consolidation of its banking sector and which it has successfully implemented."

The financial newspaper notes, among other things, that "even if the government now assigns responsibility to" speculators ", stock market turbulence is extremely worrying politics for Tsipras. Loss of confidence to banks scares foreign investors urgently needed by the country in order for the economy to grow steadily. And the country's leverage is affected by this development. "