The government reached an agreement with the banking sector to eliminate the banking levy as of July. The state will lose €300m in annual revenue and will put €1bn it has already collected from the levy into a newly created National Development Fund to finance new hospitals and rental apartments. Banks will pledge to strengthen their capital by at least the value of the levy (0.2% of select liabilities) in the coming years and pay only the rest of profits in dividends. They will also invest €0.5bn annually into the Fund or state bonds. Details of the agreement will be published next week.