Wednesday Jul 30, 2014 Search
Weather | Athens
32o C
25o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Pressure on banks to write off corporate debt

By Evgenia Tzortzi

The government is putting pressure on banks to increase funding to enterprises in an bid to see the improvement of financial conditions reflected in the real economy.

Following statements on Thursday by a top Development Ministry official suggesting that certain enterprises are in a position to grow “if banks acknowledge that a share of their loans cannot be repaid,” Alternate Finance Minister Christos Staikouras told a conference on Friday that following their recent recapitalization, “banks must stand up to their role as intermediary and supply the necessary liquidity to the real economy.”

The drive to increase the flow of resources to the benefit of the real economy from banks will be accompanied by initiatives designed by ministries aimed at changing the procedures pertaining to corporate bankruptcy and offering incentives for the restructuring of enterprises through measures favoring mergers and tax exemptions.

Banks, meanwhile, are starting to appear more willing to address the taboo issue of debt writeoffs. They say, however, that this option would be considered only on the condition that it is based on strategy and part of an overall plan for restructuring companies and bolstering of growth. They add that the cost of such a process could, initially, “be funded by the provisions that add up to 40 billion euros, part of which could be released and channelled to the economy,” as one top bank official explained.

However, according to the same sources, the discussion needs to take place without any grandstanding for the sake of public opinion.

The risk from such a tactic, which could lead to undue pressure being put on banks to write off debts without previously having done the necessary planning, could “generate phenomena of unfair competition by entrepreneurs who have declared their companies bankrupt and have parked their money abroad,” one credit sector official said.

“The issue of defending healthy entrepreneurship and the shareholders who at a time of crisis defended their own companies, is serious,” he said.

“The government should support the ethical values of the market and cannot operate in a way that creates unfair competition,” the same official added

Among the issues to come under discussion will be the standardization of the process for assessing companies’ sustainability so as to coordinate the efforts of the four systemic lenders that typically are jointly involved in loans to an enterprise. The fact that the concentration of the local credit sector has led to the existence of just four core banks has allowed for easier communication among them, and common ground has already been found.

The main criteria for the assessment process will be cash flow and the operating profits index, which determines the extent to which an enterprise can finance its obligations from its annual sales. A key element that must also be taken into account is whether each company is outward-looking and contributes to the country’s exports.

ekathimerini.com , Friday June 20, 2014 (22:57)  
Six firms submit bids to lease Vouliagmeni beach
IMF´s Lagarde not sure yet about debt relief for Greece
Deals reached for twin plot on Afandou, for 42 million
More delays and red tape for companies’ tax rebates
Greek foremen avoid jail after firing on migrant laborers [Update]
A Greek fruit exporter and three foremen arrested last year over a shooting attack against migrant labourers avoided jail or were acquitted altogether on Wednesday, a judicial source said. T...
Wine cup used by Pericles found in grave north of Athens
A cup believed to have been used by Classical Greek statesman Pericles has been found in a pauper's grave in north Athens, according to local reports Wednesday. The ceramic wine cup, smashed...
Inside News
SOCCER
Verona´s Moras donates bone marrow to brother
Hellas Verona defender Vangelis Moras is in Australia to donate bone marrow to his older brother Dimitris, who has leukemia. The transplant will take place on Saturday. Dimitris flew to Aust...
VOLLEYBALL
Volleyball national team second in European League
Much as the national volleyball team tried to repeat in the finals of the European League the feat it had achieved in the semifinals, it failed to overturn the advantage Montenegro had got f...
Inside Sports
EDITORIAL
Populism eating up education
The fact that the issue of education is not topping the list of priorities for the current coalition government, but instead, has been left in the hands of incapable politicians is utterly i...
COMMENTARY
A valued but mistreated professional
I did not know much on a personal level about Dimitris Stefanou, Greece’s former administrative reform general secretary who died earlier this week at the age of 46. I did, however, have a s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Verona´s Moras donates bone marrow to brother
2. Greek foremen avoid jail after firing on migrant laborers [Update]
3. Wine cup used by Pericles found in grave north of Athens
4. SYRIZA, DIMAR representatives to hold talks Thursday
5. Two of four suspects in Nea Manolada strawberry farm shooting convicted
6. Six firms submit bids to lease Vouliagmeni beach
more news
Today
This Week
1. Six firms submit bids to lease Vouliagmeni beach
2. IMF's Lagarde not sure yet about debt relief for Greece
3. Coalition submits new proposals for Greek coastline
4. Wine cup used by Pericles found in grave north of Athens
5. EU Commissioner Damanaki unlikely to return to Greek politics
6. Police arrest one, seek another three over counterfeit goods
Today
This Week
1. Unequal after death
2. Greek sovereign debt at 174.1 percent of GDP in first quarter
3. Hedge fund Dromeus turns Greek tragedy to triumph with 160 pct gain
4. Quadriplegic woman on life support 'dies due to unpaid power bills'
5. Front-line threats
6. Defense Minister Avramopoulos to represent Greece at European Commission
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.