ECONOMY

Lenders get conditional support

The head of the Bank of Greece and top officials from the country’s largest lenders met yesterday to discuss the improving prospects of the economy. After quite a long time, the leaders of Greece’s banking industry appeared optimistic on the economy and its future course, stating that a difficult cycle was ending and a new one beginning. They all agreed that efforts must gradually turn toward improving economic growth policies. A 25-billion-euro bank support program, seen as provideing a boost to slowing credit growth, is expected to contribute to this goal. Finance Minister Giorgos Papaconstantinou pointed out in Parliament yesterday that «this liquidity, arising from the second part of the support schedule, will be given based on one prerequisite: the submission of credit growth plans from each bank separately.» «Only under this condition will money be provided to Greek banks. The funds must reach the real economy and boost loan growth to households and businesses. This is the government’s goal,» he told lawmakers. Bank of Greece Governor Giorgos Provopoulos stressed in his meeting with bankers the need to re-establish the flow of credit to businesses and households as economic conditions and prospects improve following recent reforms. The heads of National Bank, Eurobank EFG, Alpha, Piraeus and ATEbank took part in the meeting. They, in turn, expressed satisfaction with the government’s so far successful implementation of the Stability and Growth Pact and recognized the positive prospects for the economy. Provopoulos added that this needed to be more widely communicated in Greece and abroad. Another topic of discussion at the meeting was the Bank of Greece taking over the supervision of the insurance sector, which is to begin on December 1. According to sources, Provopoulos asked that all banks take the necessary steps to improve their insurance subsidiaries. Sources added that there was no talk regarding possible merger activity in the sector.