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"We give you state guarantees for funding, but you will put money on the market," is the message the Finance Minister George Papakonstantinou sent to the Greek banks this week. The new package of government guarantees in the amount of 30 billion euros is to compensate the banks as their access to free funding from the capital markets was cut a year ago following the economic fiasco of Greece. Today, their main source of funds is the European Central Bank, which is the only one to accept the ill-fated Greek government bonds as a bargaining chip for funding.

George Papakonstantinou stipulates that banks should submit a detailed spending plan in order to receive state guarantees for funding. It should describe the programmes through which the allocated funds would be flown into the real economy to ensure proper and effective implementation of the support programme and the increase in market liquidity. The submitted plans should be then approved by the Bank of Greece, the European Central Bank, in cooperation with the European Commission and the International Monetary Fund.

At the same time, banks are trying to reduce the negative impact of the crisis in any way. The management of Geniki Bank offered its employees a total reduction of wages by 10% to avoid staff cuts. The bank employees’ trade union, however, did not like the idea and vetoed both the reduction of wages and the transfer of field collective agreements to individual business contracts.

Attica Bank is also struggling to survive the difficult economic times. The 2010 financial result showed losses of 7.1 million euros unlike last year when the profit of the bank was 5.6 million euros. They said from the management of the financial institution that the prospect for the Greek economy and in particular for local banks is an immediate reorganization of the forces so that all can emerge stronger from the present crisis.