ECONOMY

Banks urged to bring lending rates down

Economy and Finance Minister Yiannis Papathanassiou asked commercial banks yesterday to lower their lending rates. At a meeting of the Monitoring Council, consisting of Bank of Greece Governor Giorgos Provopoulos, Deputy Economy Minister Nikos Legas and all of the state’s representatives on bank administrative boards, Papathanassiou stressed that the spread between Greek rates and European equivalents remains quite high. Papathanassiou added that this is not justified by current economic developments and should be changed as soon as possible. The meeting also heard that the rate of credit expansion on an annual basis remains more than twice as high as that of the average in the eurozone. However, the expansion rate continues to decline, so that estimates for total loan disbursement growth this year are around just 5 to 6 percent. According to the latest figures of the Bank of Greece, total credit expansion in Greece came to 13.6 percent in April on an annual basis, down from 14.2 percent in March. As far as the state of the country’s banks is concerned, the meeting heard that they are in a much better situation than their European counterparts, a fact also confirmed by the stress tests of the Bank of Greece and the International Monetary Fund. Finally, according to ministry sources, the council heard that the Economy Ministry is sticking to its forecast of zero growth for the current year.