EBRD agrees with Romanian President's request for bank recapitalization

The European Bank for Reconstruction and Development agrees that bans in non-euro countries like Romania should keep their exposure in these countries, as Romanian President Basescu has said.

"We agree with the Romanian president's message that any recapitalisation has to benefit the group as a whole," Jeromin Zettelmeyer, deputy chief economist with the European Bank for Reconstruction and Development (EBRD) told EUobserver. In the event of debt restructuring, Greek banks "will require a significant recapitalisation", with the London-based EBRD seeing two scenarios: One where everything goes well and subsidiaries can go on without "being cut off from parent banks" and one when restructuring "is not handled perfectly" and national governments in Bulgaria, Romania and Serbia will have to intervene to prop the subsidiaries. "We cannot accept a recapitalisation through money withdrawal, for instance from the Romanian market, in order to withstand the crises within the eurozone," Romanian President Traian Basescu said on Sunday. However, governments in Eastern Europe have contingency plans and the International Monetary Fund (IMF) would offer financial support, according to the EBRD. Full EUobserver article here. editor@romania-insider.com