Bank policies examined

The Bank of Greece (BoG) has recommended that the government broaden its supervisory role to help shield the country’s growing number of loan holders from excessive bank charges, its governor Nicholas Garganas said. Garganas said in an interview published in Sunday’s Kathimerini that the protection of consumers is among the Development Ministry’s duties but that the central bank could lend a hand with its expertise. «The BoG has suggested a legislative regulation… that will allow it to look into particular issues in relation to the protection of parties dealing with banks,» he added. With loan growth remaining resilient in the first few months of the year despite an anticipated slowdown, a growing number of Greeks have taken up a mortgage or consumer loans. Garganas called on consumers not to incur financial commitments that will demand more than 30-40 percent of their income per month. On the energy front, the BoG head said that higher petrol prices have yet to weigh on the economy but have increased the need for the government to tackle its budgetary problems. Garganas added that higher energy prices have so far had a small impact on growth and inflation in Greece and other countries. «The possibility of petrol prices remaining at high levels in the medium term makes it more necessary for the economy to boost exports… and reduce energy consumption,» he highlighted. A cut in petrol consumption, along with the development of alternative resources, are needed, he added. Garganas repeated calls for structural changes to the country’s rigid labor market – recommendations that have been denounced by labor groups. «Structural measures are needed to reduce unemployment,» he said. Despite strong economic growth in the past few years, Greece has been unable to significantly reduce jobless figures. With national elections scheduled to be held by March 2008, Garganas also asked political parties to refrain from making costly pre-election promises in the next year that could dent public finances.