The establishment of the APS (Asset Protection Scheme) securitization of non-performing loans with a government guarantee is in the hands of the Greek side.
DG Comp has reportedly sent a letter to the Greek government, in which the Brussels technocrats raise a number of questions on the key aspects of the plan and ask the Greek Ministry of Finance, the FSF and the Greek banks for answers, in order to avoid the risk of direct government support.
The main difference with the plan implemented in Italy – the fact that the Greek government is not rated at the investment grade and, consequently, its impact on the level of the risk premium – is not easily overcome without strong documentation.
In the letter, they are asking the Greek side to provide sufficient information to accurately determine the pricing on senior notes on which the state guarantee will be.
While DG Comp’s services are waiting for answers from the Greek side, clock is ticking and the implementation of the project is postponed for after the summer, but on the Greek side they stress that there is enough time. According to the same sources, the ideal scenario would be to approve the plan, after the corrections that are in progress, by the beginning of May at the latest. However, the goal is considered particularly difficult as there are the Easter holidays, with Brussels already in European elections mode.
But even if barriers are overcome and the European Commission’s Directorate-General for Competition gives the “green light” in mid-May, implementation of the mechanism with state guarantees on securitisations will begin after 3 months, which is considered acceptable by the Greek government, as the original goal was for the whole project to begin this year./ibna