The European Commission has approved Greek government’s additional aid of EUR2.72bn to Piraeus Bank after European Central Bank stress tests identified capital gaps in the bank.

The stress tests showed that the Greek lender had capital needs of EUR4.93bn, of which the bank has raised EUR1.94bn from private investors while supervisors have granted additional capital actions of EUR271m.

The remaining capital worth EUR2.72bn will be provided by the government, which will secure the amount from the euro zone bailout fund.

The government aid, approved on the basis of the bank’s amended restructuring plan, is in line with EU state aid rules, the European Commission said in a statement.

Commenting on the move, EU commissioner in charge of competition policy Margrethe Vestager said: "I welcome that Piraeus Bank has covered a significant part of its capital needs from private investors. This is a sign of market confidence. The additional public support and further implementation of its restructuring plan should enable the bank to return to long-term viability and continue supporting the recovery of the Greek economy."

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