In statements to Kathimerini, the heads of the four major Greek banks said that the agreement with the partners is an absolute must if Greece is to confirm its European choice, remove the disastrous uncertainty and set the economy on the path of growth. The four CEOs – Leonidas Frangiadakis of the National Bank, Dimitrios Mandzounis of Alpha Bank, Antimos Tomopoulos of Piraeus Bank and Fokion Karavias of Eurobank – emphatically stated that the current situation cannot be perpetuated.
They emphasized the vital need for the immediate wrap up of negotiations through an agreement, which will benefit the country and ensure its European development. It will lay the foundations for a sustained period of growth.
Four months after the new government took office, the country looks trapped in a disastrous spiral of uncertainty dragging the economy into a meltdown. Deposits have shrunk by about €30 billion, the Athens stock exchange is down by €25 billion, non-performing loans have seen a new hike, the debt of companies and households is soaring, consumer spending is flaccid and businesses have to postpone any investment until the clouds clear up.
In recent weeks, Greece's credit worthiness was downgraded by both Fitch, Standard & Poor's and Moody's because of concerns over the outcome of negotiations and the inability of the economy to meet the challenges.
The consequences of this uncertainty have already affected GDP and other keys parameters of the economy, and this trend will exacerbate in the coming weeks. According to the Foundation for Economic and Industrial Research, growth slowed to 1.3% in the fourth quarter of 2014 against 1.5% in the third quarter. Analysts claim that in the first quarter of 2015 growth rate has tapered off to 0%.
In short, while the government is struggling to renegotiate its recessionary measures, the economy is not only losing its momentum, which it had regained after six years of steep decline, but is sliding back into recession. The situation is further complicated by the numerous statements of various officials who talk about the danger of a liquidity crunch or a calamitous Grexit.
Banks are reluctant to talk about the consequences of a possible exit from the eurozone, they have only curtly noted that it would amount to a national disaster with a great deal of unforeseeable consequences. Yannis Stournaras, governor of the Bank of Greece, warned that a rift with the partners would have incalculable consequences for the Greek economy.
Leonidas Frangiadakis. National Bank of Greece: the agreement is a national goal
Achieving the national goal – an agreement with our partners, as well as a confirmation of our European orientation – will contribute to the recovery of the Greek economy and will set the country back on the path of growth. Genuine reforms will make Greece attractive to investors.
Dimitrios Mandzounis, AlphaBank: uncertainty has to be eliminated
Removing uncertainty is a matter of vital importance not only for the banking system, but for the Greek economy as a whole. Successful negotiations with partners and a relevant agreement will release the power of our economy and will set it on the path towards development.
Antimos Tomopoulos, Piraeus Bank: Reforms are needed
The main prerequisite for the recovery of our economy is to break the cycle of underfunding and disinvestment. But improving the conditions for financing isn’t enough. Reforms are needed in key sectors such as the tax system, the judiciary, etc.
Fokion Karavias, Eurobank: The country needs growth
The country is living amidst a credit squeeze and uncertainty that plague the economy. This situation cannot continue like this. What is needed is a realistic agreement with the partners, which can be accepted by virtually all political forces -which is what happened in Portugal, Ireland and Cyprus. The country needs growth, and therefore structural reforms and attracting foreign investments and capital.
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