New development bank mulled

By Evgenia Tzortzi

The government is examining the prospect of transforming ETEAN, the National Fund for Entrepreneurship and Growth, into a new operation that could serve as a development bank and also absorb other financial instruments, with the overall objective of increasing liquidity in the marketplace.

The issue of establishing a new development bank, its primary purpose being to finance small and medium-sized enterprises, was discussed at a meeting on Wednesday between Greece’s Development and Competitiveness Minister Nikos Dendias and former French Finance Minister Pierre Moscovici, currently a candidate for the European Commission’s top post for economic and financial affairs.

In remarks following the meeting, Moscovici said he supported the objective of spurring economic growth and creating new jobs.

Dendias said Greece had requested French know-how on the prospective development bank. “We’re not talking about a foundation to receive bank deposits, but a specialized effort to promote liquidity in the marketplace,” the Greek minister noted.

He had presented ETEAN’s possible transformation at a recent Economist conference, noting that the establishment of a unified financial operation, taking in various financial activities it supports as well as funds it manages, was being examined.

At present, ETEAN has a capital base in excess of 1 billion euros, while loans extended by the fund total 700 million euros.

Transforming ETEAN into a development bank would be compatible with its current activities, as the fund already operates as a credit institution under the supervision of the Bank of Greece. It has also set up credit assessment and risk departments.

A 550-million-euro program allowing Greek small and medium-sized enterprises to borrow at half the normal lending rate was launched by ETEAN at the end of April.

The development minister at the time, Costis Hatzidakis, had announced that there had been an agreement between ETEAN and 14 banks to provide the loans to businesses. The program was designed to provide companies with much-needed working capital.