ECONOMY

Tradesmen knock bonds

The National Confederation of Hellenic Commerce (ESEE) yesterday called on the government to tackle the country’s high inflation rate which has eroded the savings of most Greeks, rather than issue special savings bonds with dubious benefits. «It would be better for the government to abandon such thoughts and instead turn its attention to bringing inflation down to EU levels,» the confederation said, suggesting the move smacks of populism. The government early this month said it would issue savings bonds to the value of 2.5 billion euros in three offerings this year and make available up to 4 billion euros in government bonds to retail investors as part of a strategy to broaden the range of investment products to individuals. The first issue of savings bonds is planned for next month. The move came after banks lowered their interest rates in December in line with the European Central Bank’s trimming of its benchmark rate. With savings interest rates hovering around 1-2 percent and an inflation rate lingering above the 3-percent level, savers actually receive a negative return on their savings. The proposed savings bonds are expected to yield a return higher than the inflation rate, officially projected at 2.5 percent this year against 3.6 percent last year. Not only is the government missing the point, it is also wasting taxpayers’ money, the confederation said. «Burdening the Greek people for the benefit of some is a waste of public funds,» it charged. It said the above-inflation yield from the savings bonds would make it difficult for Greece to reduce its high debt, the second highest in the eurozone last year. The proposed savings bonds also go against the principles of a free market.