The shares of National Bank of Greece (ADR) (NYSE:NBG) were up by 11.67% at one point in the pre-market session this morning, as the creditors have agreed to offer a third bailout to the embattled namesake country of the bank. After a 17-hour session at the Brussels’ EU summit, the head of the EU commission, Jean-Claude Juncker, announced, “There will not be a ‘Grexit’” and that the country will stay in the eurozone. Donald Tusk, EU president, tweeted, “EuroSummit has unanimously reached agreement. All ready to go for ESM program for Greece with serious reforms and financial support.” The summit has asked Greece to comply with specific financial reforms including increasing tax revenue, liberalizing the labor market, and streamlining its pension structure within the next three days. The pre-market positivity was short-lived however, as shares have made a big u-turn and are now trading down by 7.85% in morning trading.
Greece will receive financing of $95.09 billion over a period of three years and the country will also receive “bridge financing” for its short-term requirements. Jeroen Dijsselbloem, head of the finance ministers in the eurozone, mentioned a $55.28 billion Greece fund backed by Greek assets, which aims toward privatizing these assets. He further added that half of this fund will be used to recapitalize Greek banks. The eurozone members are awaiting the required reforms to release these funds. It will be difficult to implement these reforms within the next 72 hours and Greek Prime Minister, Alexis Tsipras, will have to pass these reforms through the Greek parliament.
After the announcement, Mr. Tsipras said, “The deal is difficult but we averted the pursuit to move state assets abroad. We averted the plan for a financial strangulation and for the collapse of the banking system.”
However, many Greeks are considering these as harsh terms and have expressed their anger online with the hashtag #ThisIsACoup. Mr. Juncker didn’t agree with the sentiment, adding that this situation doesn’t involve any “winners or losers” and said, “I don’t think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement.”