Gov’t ups protection on deposits

Finance Minister Giorgos Alogoskoufis says state guarantee will cover savings of up to 100,000 euros

By Stelios Bouras - Kathimerini English Edition

The Greek government will up a guarantee provided on private bank savings to 100,000 euros, from 20,000 euros currently, in a move aimed at boosting confidence among depositors as the global credit crisis deepens.

On a European Union level, finance ministers also decided in Luxembourg yesterday to double deposit guarantees on people’s savings to at least 50,000 euros in the EU’s first joint action against the global financial firestorm.

Greece is one of a number of EU states to go beyond the minimum deposit insurance.

National Economy and Finance Minister Giorgos Alogoskoufis said the step will help deal with the “temporary problems in the European financial system and the repercussions on savers and the real economy.”

“I would like to highlight the fact that our political commitment to protect the total amount of deposits still applies, beyond the legal minimum that will be increased,” he added.

A draft bill introducing the higher limit, that will apply to the coming year, will “soon” be submitted to Parliament, according to the minister.

It was not immediately clear whether all customers with money in Greek banks – including foreign nationals – will benefit from the enhanced protection.

Finance Ministry sources said Alogoskoufis is likely to make public further details on the issue today.

News of financial strife hitting European banks last week has made Greek depositors increasingly nervous, despite assurance from senior officials about the soundness of the country’s banking system.

According to Greek bankers, the value of deposits in Greece’s financial system is estimated at around 230 billion euros – roughly equivalent to Greece’s annual gross domestic product. sbouras@ekathimerini.com