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Four of the largest Greek banks need 13.4 billion euros additional financial support to withstand the impact of the 50-percent reduction in the face value of government bonds, estimated Bank of America / Merrill Lynch. National Bank of Greece, Eurobank EFG, Alpha Bank and Piraeus Bank will need a major infusion of capital after the macroeconomic crisis of the country has dropped their shares and they lost most of their value last year and a half and the debt haircut will make the last deadly impact. They are certain from Bank of America that the Greek financial institutions will not get away without the help of the Financial Stability Fund even if they significantly reduce their operational costs and sell some of their subsidiaries. The study shows that the National Bank of Greece needs 4.89 billion euros, Alpha Bank - 1.55 billion euros, Eurobank EFG - 3.77 billion euros and Piraeus Bank of approximately 3.13 billion euros.

At the same time, the Greek financial entities are struggling to find a way not to resort to the aid of the Greek Financial Stability Fund, which includes the issuance of common shares and partial nationalization. The flag the Greek banks have waved until recently that they should remain Greek after the restructuring is already down and they are seeking foreign investors to assist in raising new capital.

All options remain open until the completion of the negotiations between the International Institute of Finance (IIF) and European economists. The International Institute of Finance incorporates 400 financial institutions, many of which hold Greek government bonds. The government hopes that 90% of the private holders of Greek foreign debt will be involved in the programme, which will have to unburden the country's obligations with about 103 billion euros. Local bankers offer a lighter procedure to be used that will require less recapitalization. Greek Union of Banks offers the debt haircut to be carried out through a combined exchange. Greek specialists give an example in which the private owner of € 100 Greek government bonds with a coupon rate of 6% will receive 15 euros in cash and another 35 euros in new bonds of 30 years maturity. Thus, the real need for recapitalization of private holders of Greek government bonds would be only 30%.

It is not yet clear where the dice in the Greek roulette will fall, given that prime minister George Papandreou announced that he would call a referendum in order the people to approve or not the new arrangements for the bailout and the debt haircut. Moreover, he insists for a vote of confidence for the policy, which surely he will not get and the country most likely will face early elections.

Economic indicators confirm that Greece is a sinking ship. After all the measures for fiscal consolidation, reduced salaries, pensions and a lot of heavy new taxes, the budget deficit remains close to 20 billion euros. The main reason is that the government of George Papandreou did not dare to change the biggest wastefulness in spending and did not held any major structural reforms that would actually help to alleviate the economic crisis. According to the official announcement, the delay in achieving the formal goals of the recovery programme is due to "unexpected" deep recession, lower tax revenues from individuals and repayment of amounts due from previous periods. It does not mention the lack of activity in the privatization process, the breach of obligations under the Memorandum of financial assistance and the uncontrolled spending of public administration.