Alpha rate hike condemned

Having cheered, on Wednesday, a leading private bank’s decision to increase its lending rates while leaving deposit rates untouched, other banks yesterday failed to follow Alpha Bank’s lead. In the face of universal abuse, bankers said they would wait to see if the European Central Bank would announce a rate cut, which would obviate the need for Greek banks to boost their lending rates. Such a decision is not expected until early March. Yesterday, the government, opposition parties, consumer groups and labor unions – including bank employees – joined in a blistering attack on Alpha’s decision on Wednesday to up its rates on fixed mortgages, consumer and personal loans, as well as on visa and mastercard credit cards by 1 to 2 percent. Deputy Finance Minister Giorgos Floridis said the move «cannot be justified, especially when the tendency in the rest of Europe is exactly the opposite.» Pressed by journalists on whether the government would take action, Floridis said the banking system follows its own rules, adding that «it is not right to talk of interventionism in the sector.» However, sources said yesterday that the Development Ministry’s Competition Committee had summoned Alpha Bank to explain its decision within the next 20 days. This move is seen as a government warning to other banks that were planning to follow Alpha’s lead. Opposition New Democracy’s shadow economy minister, Giorgos Alogoskoufis, accused the government of having failed to tame the banking sector, while Synaspismos Left Coalition’s Dimitris Papadimoulis said Alpha’s move would add to inflation, «suffocate thousands of small and medium-sized companies, lead hundreds of thousands of loan-takers to despair and have a dangerous effect on the real estate market.»