ATEbank sued over party loans

A shareholder in state-owned ATEbank has filed a suit against the lender for issuing sizable loans to Greece’s two main parties, PASOK and New Democracy, based on “non-banking criteria.”

Yiannis Siatras, who is representing an association called Greek Taxpayers, refers in his suit to press reports about loans by ATEbank to the two parties. Up to 2010, ATEbank is alleged to have lent PASOK 98 million euros of the 114 million total that the Socialists borrowed from banks.

The bank, formerly known as Agricultural Bank of Greece, is also reported to have lent New Democracy 105 million euros of the 120 million borrowed by the conservatives.

ATEbank reported losses of 481 million euros in 2009 and 395 million in 2010, while it is expected to declare a loss of more than 2 billion for last year. In his suit, Siatras adds that share capital increases to cover these losses led to the state paying almost 2 billion euros. ATEbank was also given 3.2 billion euros in government guarantees between 2009 and 2011.

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