Greek government's VP chairs meeting with banks' leadership

The delays in reaching an agreement on Greece's programme are due entirely to disagreements between the lenders, government Vice-President Yiannis Dragasakis said on Monday, at a meeting with representatives of Greece's banks. 

"The tug-of-war cannot continue indefinitely. All sides must assume their responsibility," he said.

The government remains steadfastly committed to reaching an overall agreement with the institutions, while its recent contacts in Washington during the IMF Spring Meeting confirmed a shared will for a successful conclusion to the negotiations, he added.

Dragasakis noted that banks have to become part of the solution to the country's problem and a support for efforts to reconfigure the economy and achieve equitable and sustainable growth. In order to achieve this, they must regain their ability to finance the economy as quickly as possible, in a way that takes into account the lessons of the past, he added.

Factors that will facilitate the flow of liquidity include the completion of the second review, the European Central Bank's quantitative easing programme, the ability to tap international financial markets, NSRF-funded projects and activation of other special financing instruments in collaboration with the European Investment Bank, Dragasakis said.

He also pointed to encouraging signs from the real economy, such as in tourism and other industrial sectors, which indicated that important investments currently on hold could be encouraged by a corresponding policy by banks.

Second chance to over-indebted businesses and households

Dragasakis reaffirmed the government's support for reducing the mountain of non-performing loans and giving a second chance to over-indebted businesses and households, while noting that this must avoid rewarding those that had allowed their businesses to founder while becoming personally rich.

He also stressed the need to increase the use of electronic financial transactions in order to improve tax collection, urging banks to consider ways of lowering the cost of using POS terminals and electronic transactions for the businesses that still found them prohibitive.

Dragasakis additionally asked banks to assist in efforts to attract foreign direct investment, noting that this must start by restoring the country's image abroad. This, he added, required opening a 'front' at home against the "deliberate distortion of the facts, a selfish misrepresentation of reality, irresponsible danger-mongering and deliberate speculative talk." Exiting the crisis would require close cooperation between the government, banks and economic players, he noted, pointing out that bank bailouts in Greece were supported by massive contributions from society and state borrowing.

To this end he proposed the creation of a permanent forum for dialogue and cooperation between financial institutions, businesses in the real economy and the government and also a permanent channel for dialogue and communication between banks and the government to ensure there is ample warning and effective handling of the social repercussions of measures of settling overdue debt, especially for large businesses.

The meeting was held with the head and board members of the Hellenic Bank Association, as well as the heads of the country's six biggest banks (Piraeus Bank, National Bank of Greece, Alpha Bank, Eurobank, Attica Bank and HSBC). Attending on the government side, in addition to Dragasakis, were Finance Minister Euclid Tsakalotos, Justice, Transparency and Human Rights Minister Stavros Kontonis, Alternate Economy and Development Minister Alexis Charitsis, Deputy Minister to the Prime Minister Dimitris Liakos and senior ministry officials.

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