The heads of Greece’s four systemic banks stress the need for an agreement between the government and the country’s international creditors to end uncertainty and put the economy back on the path to growth.
In comments to Kathimerini, the chief executive officers of National Bank, Leonidas Frangiadakis, Alpha Bank, Dimitrios Mantzounis, Piraeus Bank, Anthimos Thomopoulos, and Eurobank, Fokion Karavias, highlight the need for a quick conclusion to negotiations with a deal that will ensure Greece’s future in the eurozone and pave the way for a long period of sustainable growth.
“The time factor is extremely important and it would be a shame if Greece did not make the most of the particularly positive economic environment created by the monetary easing policy of the European Central Bank and the significant drop in oil rates,” Frangiadakis said.
“Dispelling uncertainty is crucial, not just for the credit sector but generally for the Greek economy, which has an inherent dynamism,” said Mantzounis. For Thomopoulos, the key to economic recovery lies in “breaking the cycle of underfinancing and investment flight.”
“The country is experiencing conditions of prolonged credit pressure and uncertainty which distort the economy,” added Karavias. “This situation cannot continue. Time is a decisive parameter. The need for a realistic agreement with our institutional partners is immediate and it will have to be adopted by the majority of political parties, as was the case in Portugal, Ireland and Cyprus.”
The effects of prolonged uncertainty are already becoming apparent in the economy’s fundamentals, such as gross domestic product, with the impact set to grow in the coming period. In the last quarter of 2014 GDP posted a decline of 1.3 percent against a 1.5 percent growth in Q3, according to the Foundation for Economic and Industrial Research (IOBE). Analysts now see the annual growth rate of GDP stuck at zero in the first quarter of this year.
Consequently, while the government attempts a renegotiation to avoid taking any recessionary measures, the economy is losing the growth momentum generated in 2014 after six years of contraction and is reverting to a new course of recession, with the cost of a possible rift with creditors being too heavy assess.
“A rift with our partners would have unfathomable consequences for the Greek economy and beyond,” Bank of Greece Governor Yannis Stournaras had warned at the central bank’s general meeting.