Vassilios E. Psaltis: The crisis and what is at stake now and tomorrow

Vassilios E. Psaltis: The crisis and what is at stake now and tomorrow


Following the gradual lifting of the measures imposed due to the Covid-19 pandemic, uncertainty is the main feature of the new phase we are going through. Uncertainty regarding the economic impact of the crisis, which has not been completely revealed, uncertainty within the communities that live in fear of a new wave of the pandemic and uncertainty within the business world, which is called upon to manage the “liquidity shock” caused by the pandemic.

There are, nonetheless, many reasons to be optimistic. First of all, the Greek Government’s effective reaction in flattening the curve of the epidemic averted a health crisis, protected the lives of citizens and strengthened the Greek brand name worldwide. Secondly, the efficient adaptation of both the public and the private sector to the digital economy – at Alpha Bank, everything that could be done online was moved online – proved that digital tools exist and that a vibrant culture of modernization is present. A third reason to be optimistic is, of course, the very strong line of defense formed by the Government’s fiscal interventions, the ECB’s monetary policy and, of course, the Greek credit system’s credit extension.

However, even though facing the imminent challenges is everyone’s primary concern, what is really at stake goes beyond today. It concerns the day after and how to treat the crisis as an opportunity for a new productive model for Greece.

The financial system will find itself at the epicenter of this challenge through two great interventions that it has undertaken.

The first intervention regards the management of non-performing loans, which will lead to a redrawing of the business map and the restoration of healthy competition.

The second intervention regards the effective coverage of the investment gap caused by the 10-year economic crisis and worsened by the 2020 recession. Greece is among the five countries to receive the highest percentage of funds from Next Generation EU, the new EU recovery plan. Combined with the Partnership Agreement for the Development Framework (ESPA) funds, an unprecedented financing package of about €50 billion has been created for the coming years.

In this case, banks need to play a double role. On the one hand, they have to act as a mechanism that can best distribute savings funds, making use of their expertise in selecting the investment plans with the highest returns compared to the recurring risk. On the other hand, they need to be co-financers, supporters and advisors regarding the increased absorption of the funds and the reinforcement of the new ecosystem that the economy is in need of, in order to initiate the modernization of the post-1974 business model and the mobilization of funds towards investment.

Political willpower and careful planning along the lines that the EU is focusing – the Green economy, the smart economy and socially fair development – as well as strong financial backing from the credit institutions, can lead to a virtuous circle of new investments, the creation of new career opportunities, the transfer of know-how to Greece and eventually a repatriation of a significant number of the Greeks who now excel abroad.

The debt crisis of the past decade signaled the beginning of a long challenge which showcased all the problems embedded in the public and private sector in Greece and forced thousands of young people to seek better prospects abroad. The new crisis is the opportunity – perhaps the last one we will have as a country in the near future – to create the conditions for these people’s return.


Alpha Bank was founded in 1879 by J.F. Costopoulos. Today it operates in Greece, Cyprus, Romania, Albania, Luxembourg and the UK, offering a wide range of financial products and services. It employs more than 10,500 employees internationally.

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