$50 Billion Euro to Save Greek Banks

Greek banks are to be rescued by 50 billion euros from Greece’s international bailout. The Greek banks will be qualified as long as the economic crisis does not worsen.

Panagiotis Thomopoulos, head of the Hellenic Financial Stability Fund (HFSF) said “2013 will be a difficult year but the banking system will weather it. The troika knows that without a functioning banking system Greece will not be able to recover,”. The HFSF has already put 18 billion euros into four Greek banks, Eurobank, Piraeus Bank, National Bank, and Alpha Bank.

Aside from these billions, Greece is still awaiting it’s next 31.5 billion euro trache.

The recent approval of the Greek austerity bill was a critical step toward swaying international creditors to release the 31.5 billion euro tranche. Police estimated at least 50,000 people at the protest in Greece Thursday. The austerity bill will increase taxes and cut salaries and pensions.

Sunday, Greece will be voting on the country’s 2013 budget. This vote in Athens Sunday could be a critical indication of what direction Greece will be going in long term. If euro zone officials are attracted to it, it may make it easier for Greek to receive aid in the future.

The question is this, how does this help anything? If the banks don’t know how to manage these billions of dollars, what good will it do? Tax increases and salary cuts will only bring more pain to the people of Greece. Overall, this could only be inflicting more pain on Greece and the Euro could hurt from it in the mid to long term future.

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