ECONOMY

Credit noose strangling small firms

The Central Union of Chambers of Greece (KEEE) called on bank authorities yesterday to prompt lenders to pump more credit into the economy, arguing that small and medium-sized businesses are still suffering from credit asphyxiation. KEEE’s president Giorgos Kasimatis called on the Bank of Greece, the country’s central bank, and the Hellenic Bank Association to encourage lenders to reverse their stance and help fund the economy. «This cannot continue, small and medium-sized businesses can no longer endure this situation,» he said. The head of KEEE also threatened that Greece’s chambers of commerce will set up their own cooperative bank to finance members. Meanwhile, Economy and Finance Minister Yiannis Papathanassiou yesterday appointed state representatives to the boards of nine lenders taking part in the country’s 28-billion-euro bank support plan. «The program to bolster liquidity in the economy is in full swing,» Papathanassiou said. «The government is determined it will be implemented effectively, operate fully, and bring the greatest possible benefits to the market, businesses and households.» Greece’s major banks, except Credit Agricole’s Emporiki unit, are all tapping the government package, designed to keep lenders adequately funded and credit flowing to businesses and consumers. Under the program, the state will have a representative on each bank’s board with the power to veto executive pay and ensure funds are distributed properly. The country has earmarked up to 5 billion euros for preferred share purchases under the plan, as much as 15 billion euros to back new bank loans or refinance existing ones, and about 8 billion euros for special government bonds to provide liquidity.