Frankfurt and Brussels poring over PPC deal

The state’s deal with the Greek banks for the loans issued to Public Power Corporation (PPC) and the approval of grid operator ADMIE’s privatization plan is coming into the focus of the European Central Bank’s Single Supervisory Mechanism (SSM) in Frankfurt and the Directorate General for Competition (DGComp) of the European Commission in Brussels.

Although all sides have expressing optimism that the agreement, reached on January 13 – allowing for the splitting of ADMIE from PPC – will be ratified, no one can be certain about the outcome of the European watchdogs’ probe. Their approval is necessary for the validation of the agreement and for the 200-million-euro loan that PPC has requested be issued.

The SSM’s approval is associated with the monitoring of the exposure of banks across all of Greece’s public companies and corporations. Banks have limits on their lending to those companies and limitations on the content of such contracts, needing secure collateral; it is this parameter that is generating concern in Athens.

The involvement of DGComp is due to the state being a stakeholder in both PPC and the banks being asked to fund it.