Samaras Tells Banks To Start Lending

With the Greek government moving to recapitalize and stabilize banks, Prime Minister Antonis Samaras told the heads of the four biggest financial institutions that they should start lending against to to help ease the shortage of liquidity and boost the Greek economy.
That included lowering interest rates at a time when banks are chasing debtors to repay their loans, credit cards and mortgages in full despite big pay cuts, tax hikes and slashed pensions.
There was no report that he talked with them about the 250 million euros ($328 million) that his New Democracy Conservatives and their coalition partner, the PASOK Socialists, owe in loans and aren’t paying.
The government has also not acted on a bill that would help indebted households restructure their debt the same way Greece did when it imposed 74 percent losses on investors and bondholders in 2011, and now is seeking to do to public investors as well so that Greece can walk away from much of what it owes.
Finance Minister Yannis Stournaras also took part in the meeting with Michalis Sallas of Piraeus Bank, who has been under fire for structuring deals that made him wealthy; Yiannis Kostopoulos of Alpha Bank, Giorgos Zanias of National Bank and Christos Megalou of Eurobank. Stournaras confirmed to reporters after the meeting that liquidity had been one of the main topics of discussion.
“Now that the recapitalization of the Greek banks has been completed successfully and we have a banking system with four pillars, we want to hear bankers’ views on the Greek economy and have the opportunity to exchange opinions,” said Stournaras.
Banks haven’t been lending, keeping their recapitalization monies in the vault, cutting off vital funding for businesses after being burned with 66 billion euros ($86.6 billion) in non-performing loans with 29 percent of Greeks unable to afford to keep paying.
The meeting came after the Hellenic Financial Stability Fund (HFSF), the rescue vehicle set up to recapitalize Greece’s major lenders, picked Eurobank to buy New Hellenic Postbank and Proton Bank as part of consolidation in the sector and to meet a condition for the next tranche of Greece’s bailout.
After the meeting, Sallas said he was certain his lender would pass the stress tests due to be carried out by the end of the year and would not need a new injection of capital. The government is expected to set out at the end of the month its plans for further strengthening of Greece’s banking sector.