Message for banks sends Finance Minister Christos Staikourasnoting, among other things, that “today, in an environment of growing challenges, growing risks, high volatility and high uncertainty – internationally – the banking system must be at its best.”

The message came days after his meeting with bank executives, which raised a number of issues, mainly related to the side effects caused by higher interest rates on loans due to the policy pursued by the ECB as a “medicine” to combat inflation.

The government is worried, as is the head of the central bank, who foresee an increase in “red” loans and a general strain on the family budgets of borrowers. The financial staff was on the lookout as they see the coming problem and try their best to stop it. It is worth noting that the governor of the Bank of Greece recently noted that “we will have an increase in red loans. When you have a combination of increased premiums due to higher interest rates, i.e. mortgage premiums will also rise, the premiums of companies that owe money to banks will also increase.”

In his statement to APE-MPE, Christos Staikouras emphasizes: “From the beginning of its existence, and especially during the multilevel crises of the last 2.5 years, the government has supported – and continues to support – society to the extent possible. Support provided through significant reductions in taxes and social security contributions, the implementation of a wide range of measures to overcome exogenous difficulties, the implementation of measures to stimulate employment, investment and social cohesion, the implementation of structural changes and reforms, and the rapid and efficient use of available European resources Support that indirectly also benefits the financial sector, which, thanks to effective economic policies and the positive outlook for the Greek economy, has a much stronger image compared to the past and favorable prospects.”

It is noted that according to the information, the Minister of Finance at a meeting last Thursday said, among other things, that the new Bridge program is just around the corner and other solutions should be sought.

However, there seemed to be no particular desire on the part of the banks to take on the costs of the necessary facilities. No final decisions have been made, but both sides (Ministry and Banks) acknowledge that the task is very complex and it will take time to reach an agreement.

According to the Ministry of Finance, the banking system should:

• promote credit expansion with all available tools in order to strengthen the perimeter of potential clients for financing, taking into account new needs created by the changing economic environment
• intensify efforts to quickly resolve debt through a new and modern out-of-court mechanism in order to be adequately protected from new hidden risks
• reform pricing policy on loans, deposits and fees in a way that does not place a disproportionate burden on businesses and households as we emerge from a low interest rate environment
• be sensitive to vulnerable social groups
• educate staff and customers on the digital transition of their operations
• contribute to the green transformation of the economy

At the same time, in his statement, the minister notes that “all of the above is necessary for banks to make a significant contribution to the transition to a more dynamic, more productive, more open, digital, green, inclusive economy and inequality.”

It is recalled that the meeting in question was preceded by the Prime Minister, who, speaking in Patras, left open the possibility of supporting successive borrowers, saying characteristically: “(…) And since we are really now facing a problem with the increase in the cost of borrowing, I asked the Ministry of Finance exhaust all avenues for regular borrowers to see what we can do on this issue in consultation with the banks.”

At the same time, Christos Staikouras made it clear in a recent interview that, in fiscal terms, the conditions are not comparable to those of the pandemic and, therefore, any decision should be made depending on whether there is a fiscal margin. “We are evaluating all potential interventions that we can take, taking into account the existing fiscal space, because in the past there was no fiscal flexibility,” he said and added: “Banks should expand the financing perimeter of potential customers to further support enterprises.” . He also said that “banks should have accelerated the out-of-court debt settlement mechanism” and added that the government continues to put pressure on lending institutions to perform better.

Describing the agenda of negotiations with bankers, he touched upon the issues of credit expansion, the extrajudicial mechanism for the pricing policy of deposits and commissions, as well as the issue of increasing the cost of borrowing for citizens.

There was also discussion of the Spanish plan, which he says is under review, with the first image showing it has no financial cost (because it involves a deferred payment), but indicates that it needs further processing. The same applies to other proposals that Member States are discussing, he added.

with information from APE-MPE