The success of the recapitalization of Greek banks will depend on the return on investments of about 20 billion euros, which citizens taken abroad or kept at home.
Four leading Greek banks – Piraeus Bank, Alpha Bank, National Bank and Eurobank was completed in June by the EU and IMF loans its recapitalization in the amount of 27.5 billion euros. This should enable them to restore solvency after write-downs of their assets were in Greek government bonds as part of the restructuring of Greece’s debt to private investors, as well as write-downs of their own loans were classified as bad debts. The current objective of the banks – to regain access to international markets to increase lending to the economy, which is experiencing its sixth year of recession.
According to the Greek Minister of Finance “to recapitalize banks succeed, a prerequisite is to return to Greece and deposits in local banks, money that is now stored in the trunks and under the mattress.” The minister praised the possible amount of the funds of 20 billion euros, while stressing that citizens should not be afraid of any write-offs of deposits. “There is no risk of” haircuts “deposits”, – assured Sturnaras.
Finance Minister stressed that Greece must strengthen its export potential to become competitive. “Business must be based on the growth of exports and import substitution” – the minister said, pointing out that “the reforms have led to major changes in the balance of payments on current transactions,” which previously had a negative balance. “Perhaps for the first time in decades we have a zero balance of payments on current transactions – said Sturnaras. – Greece has a huge competitive advantage, especially in the manufacture of products such as olive oil, which are not really used.”
The Minister noted that “on the basis of data on government revenues in seven months, the state budget of Greece, under certain conditions, is likely to be reduced at the end of 2013 with a primary surplus (excess of income over expenditure excluding debt service)”. “Naturally, there is a light at the end of the tunnel, the recession will be milder – said Sturnaras. – This year, the pace will be less than 5 per cent, although this can not be considered a huge success. In 2014, we will be able lock positive rates of economic growth.”