Greek progress in the banking sector and the economy received praise by European financial institutions’ Greece mission chiefs on Thursday, during the 26th Annual Economist Government Roundtable.
The reduction of Greek banks’ so-called nonperforming loans near a 10% mark was called a “great step” by the European Commission’s Mission Chief for Greece Julia Lendvai, who also referred to the increase in their operational profitability.
This positive image, she said, will continue as long as the reforms also continue, which will contribute to Greece getting the much-desired investment grade.
She did, however, say a great number of businesses in the private sector are overindebted, and that this problem needs to be addressed so viable businesses can grow and be modernized.
The same challenge was mentioned by European Central Bank (ECB) Mission Chief for Greece Martin Bijsterbosch, who said the private sector still has a high volume of nonperforming loans, which are undermining growth and need to be addressed.
Managing those, he said, will be extremely important for the economy, adding that a restructuring strategy is needed to complement the reduction of bad loans, along with a modernization of the relevant parts of the judicial system.
These are, he said, problems known to the government, and it is trying to resolve them.
European Stability Mechanism (ESM) Deputy Head of Financial Sector and Market Analysis and ESM Mission Chief for Greece Paolo Fioretti emphasized that confidence has been restored in Greece’s banking sector, and he referred to the institutional changes made at the European level in this direction, such as the steps taken toward the European banking union, which must be strengthened to reduce fragmentation.