On the sidelines of a meeting of the European Parliament’s Committee on Budgets in Brussels, PASOK MEP and committee member Nikolas Farantouris launched a sharp criticism of Greek banks’ practices.
Differences in lending and deposit rates
The PASOK MEP and professor of European law is seeking answers over the significant disparities in interest rates in Greece: “Greek consumers borrow at 10.35%, compared with 7.82% in the eurozone. And Greek savers receive an interest rate of 1.28% on fixed-term deposits, compared with 2.33% in the eurozone. Why?”
The lending tap remains closed
Nikolas Farantouris also highlights small and medium-sized businesses’ limited access to liquidity and unjustifiably high bank fees: “Greek taxpayers paid €47bn to get the banks back on their feet.
Yet this September, lending to farmers, the self-employed and sole traders was 2.2% lower than a year earlier. The corresponding decline in the eurozone was less than half that (1%). When it comes to the small business owner or farmer who paid to save the banks, the tap is turned off much faster.”
“Who controls Greece’s banks?”
According to Nikolas Farantouris, Greek banks have no incentive to support the real economy, small and medium-sized businesses or the primary sector in a banking system that has largely passed out of Greek hands, where systemic banks are 80%-90% controlled by foreign funds: “Really, who controls the so-called systemically important banks in Greece?
Why, foreign funds! National Bank of Greece? 80.55% held by foreign funds. Alpha Bank: 85.8% held by foreign funds. Piraeus Bank: 87% held by foreign funds. Eurobank: 90.35% held by foreign funds. Foreign funds control and manage more than 180 billion in deposits held by Greek citizens and, of course, their mortgages.
More than 5,000 branches have closed across Greece in recent years. Are these the people who will care about the Greek economy, mortgages, small and medium-sized businesses and the regions?”, the Greek MEP concludes.
An upgraded Hellenic Development Bank
Nikolas Farantouris believes the only serious development proposal for reshaping the banking system is PASOK’s plan for an upgraded Hellenic Development Bank, serving as a permanent instrument of development policy rather than merely managing EU programmes or acting as a “parking lot” for funds.
He also reiterates the need for an automatic emergency levy on banks’ excess profits, with the proceeds going to the Public Investment Programme and a special fund to address the demographic challenge.
“PASOK tabled a specific legislative proposal as early as April, with its president, Nikos Androulakis, as lead signatory. It calls for an emergency levy of 8% on net profits above €400m for the 2025-2026 financial years, as a minimum social dividend in recognition of the Greek people’s contribution to the recapitalisations. We are also calling for faster amortisation of deferred tax, with an additional 8% amortisation against distributed profits to improve the quality of capital. And, of course, for all abusive practices and charges to be abolished,” Nikolas Farantouris concludes.