European Commission approves Greek government aid to Piraeus Bank

The European Commission approved on Sunday additional Greek government aid to the country's biggest lender Piraeus Bank on the basis of an amended restructuring plan after European Central Bank stress tests showed the bank needed extra capital.

"The European Commission has approved additional state aid of 2.72 billion euros to Greek Piraeus Bank under EU state aid rules, on the basis of an amended restructuring plan," the Commission said in a statement on Sunday.

"I welcome that Piraeus Bank has covered a significant part of its capital needs from private investors. This is a sign of market confidence. The additional public support and further implementation of its restructuring plan should enable the bank to return to long-term viability and continue supporting the recovery of the Greek economy."

The ECB estimated the capital needs of Piraeus Bank at 4.93 billion euros. Of that, the bank raised 1.94 billion from private investors and supervisors also approved additional capital actions of 271 million euros, the Commission said.

The remaining 2.72 billion euros will be covered by the Greek government, which will receive money for that purpose from the euro zone bailout fund.

[Reuters]