Monday, 24 October 2011
With large parts of their banking sector in French, Austrian or Greek hands, eastern European countries are wary that upcoming rules on bank recapitalisation will allow regional subsidiaries to be drained of money, putting their economies at risk.
"We cannot accept a recapitalisation through money withdrawal, for instance from the Romanian market, in order to withstand the crises within the eurozone," Romanian President Traian Basescu said on Sunday (23 October) after the first part of an EU summit which will continue on Wednesday to set out conditions for a €100 billion cash injection into Europe's most troubled lenders.
He also blamed his fellow colleagues' indecision for driving up borrowing costs in eastern Europe due to the worsening situation in Greece.
Half of Romania's banking sector is owned by cash-strapped Austrian and Greek banks, such as Erste, Raiffeisen, Alpha Bank and Eurocredit. The country's national bank has called on foreign subsidiaries to raise their capital in Romania if their parent banks face troubles back home due to Greek exposure.
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