“Income deduction by consent or worse, by regulation…”

«I didn’t ask for the 10% income cut», the president of ABG Mr Thodoros Pantalakis states in protothema.gr, adding that the bank administration and he submitted a program for the Bank’s restructure, which anticipated a cost reduction of 16,6%. However, the Troika disagreed with that percentage and asked for reductions up to 25%.

So, to achieve a 25% cost reduction, a wage reduction of 10% is required «which was proposed by the minister of Finance Mr G. Papantoniou». Besides, the administration implements the decisions of the Greek State, which is the main shareholder.

According to Mr Pantalakis, this reduction must be approved by the employees, which means that they must sign a collective agreement. But after discussions with them and the representatives of insurance funds, the ABG president expects that they will not accept the reductions. This development indicates that the only possibility for the State is a regulation adjustment. In such a case, the new regulation might be even worse for employees, according to his experience from past regulations with which he was involved. This is because, unlike the collective agreement, the employees are not involved in the regulation adjustment.

Priority to capital increase and not to merger

The priority for ABG is capital increase and cost reduction data (reduction of expenses, share sales), rather than the merger with the Trust Fund and the Post Bank, he adds.

ABG is considering a capital increase of 1bil euros (675mil euros for the buy-out of premium funds and 325mil for capital reinforcement).

In his conclusion, Mr Pantalakis mentions that the restructuring program is not final as it must be approved by the Competition Commission and the European Commission. Besides, similar restructures have taken place in Europe as with the Dutch ING, the Belgian Fortis and Commerzbank. In all three cases, restructuring plans with wage cuts, lay-offs and share sales were submitted.