by Paul Betts
Financial Times
May 26, 2011
In ancient times Greek tragedy was performed in four distinct parts – three tragedies followed by a comedy. The purpose was apparently to allow the audience to purge its fears through the sufferings of the characters on stage.
In the tragedy that is modern Greece’s parlous financial state there is no easy way for the audience to purge its fears. Exactly where we are in the current ritual is difficult to say. What is sure is that, much as in ancient times, some of the most significant action is being played out away from the stage.
Take the manoeuvrings in and around the Greek banking sector where this week the major actors have been reporting their first-quarter numbers. Beyond the figures themselves, which beat some expectations but still show a system under considerable stress, the big outstanding issues remain sector consolidation, funding and lending capacity.
The attempt earlier this year by National Bank of Greece, the country’s largest lender, to coax the number three group Alpha Bank into a friendly merger was rejected out of hand by the smaller partner. But the need for consolidation has not gone away. Far from it.
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