ECONOMY

Banks feel uncertainty is ebbing after ECB decision

Greek banks breathed a sigh of relief upon hearing the European Central Bank’s decision to maintain emergency collateral rules beyond 2010, allowing local lenders to continue borrowing from the ECB without problems also into 2011. Bank of Greece Governor Giorgos Provopoulos told Kathimerini the measures to contain the state deficit would soon bear fruit, allowing Greece to see out its borrowing program without resorting to the EU support program, including money from the International Monetary Fund, as decided Thursday by EU leaders. Speaking to Kathimerini, National Bank Chairman Vassilis Rapanos said the ECB decision along with that of the European Council are improving the financial climate to a considerable degree. «The implementation of the Stability and Growth Program without deviations is of vital importance for the future,» he stated. The alternate chief executive officer of EFG Eurobank, Nikos Karamouzis, said this was a particularly favorable development, but noted that «we are at the start of a long and arduous course, and not at its end.» Thodoris Pantalakis, chairman at ATEbank, noted that there is now a safety net being created for Greece and «we now have to devote ourselves to fulfilling the Stability and Growth Program and the targets set.» The timing of ECB President Jean-Claude Trichet’s announcement just hours before the European Council meeting Thursday was seen as open support for the Greek economy and the country’s efforts toward fiscal rehabilitation. It is no surprise the positive impact in the bond market was immediate. The extension of the collateral rules beyond 2010, without even setting a deadline, adds to the stability of the local credit system, according to the country’s top bankers.