Greece

National Bank's plan to absorb Eurobank to form Greece's biggest banking group will be suspended until both are recapitalised, and a state bank support fund will decide if the they should merge, a Finance Ministry official said on Sunday, Reuters reported. National acquired 84.3 percent of Eurobank via a share swap in February with a view to absorbing it as part of broader consolidation in the banking industry to cope with fallout from Greece's debt crisis and deep recession.

Greece will extend a deadline for the recapitalisation of its banks by a few weeks, possibly until the end of May, Greek central bank chief George Provopoulos said on Monday. Greek banks, which are being recapitalised with funds from the country's latest EU/IMF bailout, have been lobbying for the terms of the recapitalisation scheme to be sweetened and also sought an extension to an end-April deadline for the plan. "There will be a small extension of a few weeks, it may be pushed to the end of May," Provopoulos told state TV.

A dispute over the sacking of civil servants has stalled talks between Greece and the “troika” of international lenders, delaying disbursement of €2.8bn in bailout aid due this month amid fears the country’s bailout programme is already veering off track, the Financial Times reported. A joint statement by the European Commission, European Central Bank and International Monetary Fund said: “Significant progress has been made but a few issues remain outstanding.” It added that the mission would return in April after more technical work had been done.

Talks between Greece and a delegation of international inspectors are set to enter a second week after bogging down in a spat over public-sector layoffs, setting back government hopes for a speedy review of its reform program, The Wall Street Journal reported. Government officials signaled on Sunday that representatives from the European Commission, European Central Bank and International Monetary Fund, known as the troika, were expected to stay in the Greek capital for several more days to discuss plans to shrink Greece's bureaucracy.

President Nicos Anastasiades of Cyprus will ask Athens to hand over €2bn from its own bank recapitalisation package to rescue Cypriot banks with operations in Greece, say officials in Nicosia, the Financial Times reported. The unusual request comes as Cypriot officials desperately try to avert a so-called haircut of bank deposits held on the island as part of a proposed €17bn bailout being negotiated with the EU and International Monetary Fund.

Greece missed key revenue targets by a wide margin last year, triggering concern over whether the government is fully committed to cracking down on tax evasion and graft, according to a confidential report by EU and International Monetary Fund experts leaked to Athens media. A drive to boost collection of overdue tax raised only €1.1bn in 2012, compared with a target of €2bn, according to the report. At the same time Greece’s mountain of unpaid tax increased by 10 per cent to €55bn, equivalent to almost 30 per cent of national output.

The International Monetary Fund in its latest report on the Greek bailout took an interesting look at how far euro-zone economic output would fall if Greece ditched the common currency. The fund’s answer: Maybe a lot, maybe not so much – though even the “not so much” scenario looks pretty bad, The Wall Street Journal Real Time Brussels blog reported. The immediate problem for the euro zone is that a resurrection of the drachma would leave many of Greece’s public and private-sector debts to foreign creditors denominated in euros.

The International Monetary Fund approved a EUR3.3 billion ($4.3 billion) loan tranche to Greece as expected Wednesday, giving the official sign-off to the controversial program, Dow Jones Newswires reported. The IMF had stalled approval for nearly a year as it pushed Europe to restructure the country's debt and pressed Athens for more economic policy changes. The country has taken major steps to cut spending and reduce its deficit, and IMF Managing Director Christine Lagarde said the bailout program is now moving in the right direction.

Greek lawmakers voted late Friday to increase taxes on middle- to high-income earners, self-employed professionals and businesses despite vehement objections by the political opposition and several ruling coalition deputies who said austerity-weary citizens should not be subjected to further pain, the International Herald Tribune reported.

A multimillion-dollar embezzlement case involving Greece's national tourism agency has dealt a new blow to the crisis-hit country's political establishment, the Wall Street Journal reported today. Auditors in December were asked to examine what government officials say is a hole in the agency's books, after an incident involving an allegedly fraudulent check raised questions about possible corruption at the agency. The auditors have discovered a series of improper transactions totaling about €12 million ($15.8 million) and extending back as far as 2003.