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A bank oligopoly has been established in Greece

18 December 2013 / 22:12:42  GRReporter
4718 reads

Anastasia Balezdrova
For some time the Greek government has been jubilant that, in 2013, not only did it balance the state budget but it even achieved a primary surplus. Some European politicians congratulated official Athens for the progress but the difficulties in the negotiations with the lenders’ representatives show that the recovery of the Greek economy is actually not going so smoothly.

Inside the country, Drassi is one of the few political parties that are openly criticizing the cabinet's policy of not carrying out real reforms and of compensating its unwillingness to shrink the huge public sector through higher taxes. GRReporter talked with one of the active members of the liberal party, Kostis Lympouridis, about the banks, the political situation in the country and the likelihood of early elections.

Mr. Lympouridis how would you comment on the proposal of Governor of the Bank of Greece George Provopoulos that the subsidiaries of Greek banks in the Balkans should merge so that only one bank remains in each country?
The conditions in the banking market are quite extreme today. A huge "black hole" had formed because the state was unable to meet its obligations, i.e. the bonds. The agreement with the lenders stipulated that the banks would be recapitalised in order to be compensated for these losses as well as for the losses from loans in the red. The reason was the same: instead of reducing its spending, the state had increased the taxes. Therefore, many people could no longer meet their obligations related to loan payments.

This "black hole" was filled with the recapitalisation of banks. At the same time, as I have said, the government is not carrying out any reforms and is even continuing to increase the taxes in order to increase its revenue. This is limiting the market liquidity and increasing the number of people who cannot pay their loan instalments. The fear is related to the fact that the phenomenon will open another "black hole" in the banks and it is not clear how it will be filled because the contract does not provide for new recapitalisation. It is not possible for the government to approach its lenders and tell them to cover the losses from the loans in the red because it itself has caused them by increasing the taxes. At the same time, no one wants to cut the deposits of citizens, after the example of Cyprus.

I think that George Provopoulos suggests that the banks should sell their assets in neighbouring countries and cover the losses with the proceeds. Furthermore, the Greek banks are now only four and this creates an oligopoly. I think he, therefore, believes that it makes no sense for each of them to have a separate subsidiary bank and suggests that each of them should have an interest in a different country.

We have recently heard one of the politicians involved in the "Initiative of the 58" for the creation of a social democratic centrist party to use the slogan of Drassi party, namely, "We want to be citizens rather than customers." How would you comment on that?

Mr. Psarianos is very close to the positions of Drassi. He often expresses a positive opinion about the party and the things it does. I think they have influenced him as well as the slogan. Furthermore, the slogan itself is very successful and meaningful and perfectly suitable to support his words. Therefore, I am not particularly impressed that he used it. I am sure that he has taken it from us and I am sure that his positions are not different from ours.

What impresses me many times is that, while we are ultimately being influenced by different personalities and situations, many people are afraid or ashamed to say that a position they support is a position of Drassi. The same thing happened with the Prime Minister himself, during his last television interview. In response to a question on the property tax, he said that he had heard from different sides the opinion that the municipalities should collect the tax. Currently, the state is trying to collect revenue from the tax and, at the same time, it is giving the municipalities an amount equal to this revenue. The position of the Drassi party is that the local municipalities must be separated from the central budget and raise revenues from the property tax paid by the residents of the municipalities and determined by the municipalities themselves. This tax will be only one and will replace all municipal fees and taxes that we are paying at present. We will thus have competition between the municipalities on the one hand and more transparency on the other. It will be easier for the residents of the municipalities to hold the municipalities, rather than the central government, responsible for the increase in the tax.  Therefore, in this interview, Prime Minister Antonis Samaras said he had heard this idea from different sides, that his opinion of it was positive and that it should be implemented at some point. We are glad that someone has finally listened to our words but, in fact, it is once again unclear that this is actually a proposal of Drassi.

Our party often expresses positions that are reasonable and excellent from a technocratic viewpoint. Since our election rate is very low, we are out of parliament and others often refer to our positions, without mentioning that they belong to Drassi.

Why is this happening? Why has Drassi failed to communicate its messages to the public? Recently, even people who otherwise do not support your policy have supported your initiative for the property tax...

Tags: PoliticsEconomyLiberal partyDrassiKostis LympouridisPolitical instabilityEarly elections
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