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Victoria Mindova

"The face value reduction of Greek government bonds (Private Sector Involvement-PSI) is the gift of the banking system to the state in the process of financial recovery," said the Executive Manager of Piraeus Bank, Alexandros Manos, who spoke on the second day of the forum The Time for Responsibility, Decisions & Action. This gift, however, is a very large portion of the capital of Greek banks and will be paid by the shareholders of financial institutions. "Therefore, we need additional resources."

The local financial system should continue to operate, if there is no additional funding to replace the bankers 'gift' to the Greek state. In this case, the Greek fund for financial stability, which is funded by European countries, comes to the rescue. It contains € 30 billion, which could fill the gap left by the PSI. These funds will not come in the form of preferential loans, but against surrendering the ownership of banks’ property to private hands. ​​Local bankers do not like the idea, but the prospects, if this does not happen, will be much gloomier.

The second question Alexandros Manos clarified was, "Why should the involvement in the reduction of the face value of Greek government bonds be voluntary?" It is because if Greece says that it will not pay regardless of the willingness of creditors, then capital markets will not allow the country to borrow from them until the bilateral institutional support loans from the International Monetary Fund and the European countries are not paid.

He is clear that the country cannot move forward unless the sacred thought that has been driving public policy in Greece so far - "the most important thing is to keep the jobs of civil servants by all means" – changes. The new priority of the Greek government should be to preserve the value of real estate in the country. This is the major investment of the Greek citizens, who have invested a lot of money in it and its proper development can lead to attracting new investment and market development.

We know that there is no risk-free operation. This is what we have learnt from today's debt crisis, said Christos Grotsos, who is Secretary General of the Association of Greek Bankers. The long-term recession, in which Greece plunged, has led to delays and difficulties in the payment of debts made in the past. Repaying mortgage loans given in the last decade has become difficult because the recession has hit the real estate market. He insists that the problem is political and investment will not come until socio-political stability is established in the country.

Grotsos stressed that the banking sector is one of the most regulated sectors after the toy industry and nuclear energy. However, the financial system suffers one of the largest burdens of the debt crisis. Its credibility has been seriously injured and according to the head of Attica Wealth Management Todoros Krintas, it could be restored by increasing the capital adequacy and the second is responsible lending. "Liquidity will be limited for a long period of time, the operating capital market of banks and companies will be strictly regulated, and cash will be much more valuable than investments in real estate and other property," Todoros Krintas forecasts in the medium term.

"It is not true that there are no funds in the international financial community. They still just do not want to invest in Greece," said Sokratis Lazaridis, president of the Athens Stock Exchange. The problem is that uncertainty has increased seriously and global players are already extremely cautious. He recalled that the primary role of financial markets is to concentrate capital and fund business projects for companies on the stock exchange. From this perspective, the activities of the Athens Stock Exchange can help the companies find funding in a period of low liquidity.

"We have to do several things in Greece to attract new funds. The first is to help improve the profile of the Greek market in the eyes of foreign investors." Lazaridis’ presentation made it clear that the main problem does not come from the operation of the stock exchange, but is influenced by the negative climate imposed by the debt crisis. The president of the Athens Stock exchange said that in the past seven years, the companies on the stock exchange obtained about five billion annually to fund their activities. He stressed that this is an impressive amount if compared with stock exchanges in the region, including Egypt and Turkey. 50% of the stock capitals are foreign and owned by investors outside the country, and despite the economic crisis in the last two years, external players make 45% of the stock exchange daily turnover.

As for the reduced liquidity and decline in the daily turnover of the stock exchange to € 35 million, Lazaridis explained that the main indicator of the velocity of money circulation has approached the European average. Furthermore, the number of shares that changed hands this year does not fall below the level established in 2010. The reason for the reduced turnovers is in the lower stock prices and mainly of banks’. These prices are not influenced by the level of services and transactions on the stock exchange but by the macroeconomic environment. The Athens Stock Exchange maintains high standards of work and meets all business standards, which explains why despite the continuous reduction of credit ratings of various financial institutions and the negative climate as a whole, the Athens Stock Exchange remains with high credibility.

According to Lazaridis, the privatization campaign in Greece remains an unused advantage. There is significant response to it by the international community that, according to him, can attract new investors and not only for the specific program. Privatization investment will unburden inefficient public sector enterprises and deserted property and will also attract additional capital which will strengthen the overall private sector. Tax rates for large stock investments in Greece are attractive, says Lazaridis, which was confirmed by the President of Invest in Greece Aristomenis Sougros. What stops foreign investors from engaging and investing in major projects in Greece is the cumbersome judicial system that does not provide for quick solutions to disputes.