Stress test claims one Greek bank

The National Bank of Greece, Thessaloniki branch, originally uploaded by Teacher Dude's BBQ.

The much hyped stress test of Europe's banking system is intended to ally fears in the world money markets over the ability of the continent's financial system to weather a meltdown. In the end just seven of the 91 banks failed to make the mark, five Spanish, one German and one Greek.

Athens is claiming this as proof of the rude health of Greece's banking institution and the state run TV channels are running the story as if it was a 5-1 victory in the World Cup. However, by strange coincidence the one institution that failed the test is the state controlled ATE (Agricultural Bank of Greece) which is also responsible for hundreds of million in loans to the country's two largest parties. The ruling PASOK party lead by Giorgos Papandreou owes 98,6 million euros whereas the opposition New Democracy party which was in power till last September has debts of 105 million.

In addition the parties also owe sizeable amounts to Piraeus bank which narrowly escaped the same fate as ATE. It seems strange that the two banks which fared worse in the stress test are the one so intimately associated with parties in government.

A mind more suspicious than my own might come to the conclusion that ATE and perhaps Piraeus have been used as a private piggy bank by those in power and that much of ATE's present weakness comes from the Greek State's chronic inability to maintain a distinction between the needs of the Party (whatever ideological colours it purports to fly) and the needs of the country.