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A bank oligopoly has been established in Greece

18 December 2013 / 22:12:42  GRReporter
4683 reads

Anastasia Balezdrova
For some time the Greek government has been jubilant that, in 2013, not only did it balance the state budget but it even achieved a primary surplus. Some European politicians congratulated official Athens for the progress but the difficulties in the negotiations with the lenders’ representatives show that the recovery of the Greek economy is actually not going so smoothly.

Inside the country, Drassi is one of the few political parties that are openly criticizing the cabinet's policy of not carrying out real reforms and of compensating its unwillingness to shrink the huge public sector through higher taxes. GRReporter talked with one of the active members of the liberal party, Kostis Lympouridis, about the banks, the political situation in the country and the likelihood of early elections.

Mr. Lympouridis how would you comment on the proposal of Governor of the Bank of Greece George Provopoulos that the subsidiaries of Greek banks in the Balkans should merge so that only one bank remains in each country?
The conditions in the banking market are quite extreme today. A huge "black hole" had formed because the state was unable to meet its obligations, i.e. the bonds. The agreement with the lenders stipulated that the banks would be recapitalised in order to be compensated for these losses as well as for the losses from loans in the red. The reason was the same: instead of reducing its spending, the state had increased the taxes. Therefore, many people could no longer meet their obligations related to loan payments.

This "black hole" was filled with the recapitalisation of banks. At the same time, as I have said, the government is not carrying out any reforms and is even continuing to increase the taxes in order to increase its revenue. This is limiting the market liquidity and increasing the number of people who cannot pay their loan instalments. The fear is related to the fact that the phenomenon will open another "black hole" in the banks and it is not clear how it will be filled because the contract does not provide for new recapitalisation. It is not possible for the government to approach its lenders and tell them to cover the losses from the loans in the red because it itself has caused them by increasing the taxes. At the same time, no one wants to cut the deposits of citizens, after the example of Cyprus.

I think that George Provopoulos suggests that the banks should sell their assets in neighbouring countries and cover the losses with the proceeds. Furthermore, the Greek banks are now only four and this creates an oligopoly. I think he, therefore, believes that it makes no sense for each of them to have a separate subsidiary bank and suggests that each of them should have an interest in a different country.

We have recently heard one of the politicians involved in the "Initiative of the 58" for the creation of a social democratic centrist party to use the slogan of Drassi party, namely, "We want to be citizens rather than customers." How would you comment on that?

Mr. Psarianos is very close to the positions of Drassi. He often expresses a positive opinion about the party and the things it does. I think they have influenced him as well as the slogan. Furthermore, the slogan itself is very successful and meaningful and perfectly suitable to support his words. Therefore, I am not particularly impressed that he used it. I am sure that he has taken it from us and I am sure that his positions are not different from ours.

What impresses me many times is that, while we are ultimately being influenced by different personalities and situations, many people are afraid or ashamed to say that a position they support is a position of Drassi. The same thing happened with the Prime Minister himself, during his last television interview. In response to a question on the property tax, he said that he had heard from different sides the opinion that the municipalities should collect the tax. Currently, the state is trying to collect revenue from the tax and, at the same time, it is giving the municipalities an amount equal to this revenue. The position of the Drassi party is that the local municipalities must be separated from the central budget and raise revenues from the property tax paid by the residents of the municipalities and determined by the municipalities themselves. This tax will be only one and will replace all municipal fees and taxes that we are paying at present. We will thus have competition between the municipalities on the one hand and more transparency on the other. It will be easier for the residents of the municipalities to hold the municipalities, rather than the central government, responsible for the increase in the tax.  Therefore, in this interview, Prime Minister Antonis Samaras said he had heard this idea from different sides, that his opinion of it was positive and that it should be implemented at some point. We are glad that someone has finally listened to our words but, in fact, it is once again unclear that this is actually a proposal of Drassi.

Our party often expresses positions that are reasonable and excellent from a technocratic viewpoint. Since our election rate is very low, we are out of parliament and others often refer to our positions, without mentioning that they belong to Drassi.

Why is this happening? Why has Drassi failed to communicate its messages to the public? Recently, even people who otherwise do not support your policy have supported your initiative for the property tax...

The Greek media almost exclusively pay attention to the parties that are presented in parliament. With the exception of the election period, you can hardly see smaller parties in the media. At the same time, the majority of the citizens are informed about them, from television and radio broadcasts. So, even if we publish something in a newspaper or conduct a local campaign in Athens, this news is not likely to reach all parts of Greece.

This goal requires funds and we have no access to government funding unlike the smallest parties, such as Green Environmentalists for example, which are receiving huge amounts because they have one Member of the European Parliament. I read that last year the party received state funding to the amount of 900,000 euro. Therefore, a party like Drassi, which is financially supported by its members, is unable to compete with the political parties that receive government subsidies. It is easier for them to pay for advertising in the media, to participate in TV broadcasts, etc.

Another issue is the requirement of the Council on Television and Radio to the media that they should give the parties time to present themselves in accordance with their result at the last elections. We obtained 1% of the votes, which means that our appearance is once in a month. This rule is observed, but as you understand, it is not sufficient if the other forces are continuously represented.

What is your forecast for the events in Greece in 2014? Do you think that there could be early elections? What result do you expect from the local elections?
To be honest, I am concerned because I see that all the political forces are "pulling the rope tight". On the one hand, the government is seeking to extend its life as long as it can but it is not carrying out the reforms that will provide real solutions to the problems on the other. What it is actually doing is postponing the payments to suppliers, thus ensuring the desired budget surplus. So, the only thing it is gaining is time, awaiting the solution to the problems to be godsend. Of course, this cannot happen. I think the government really wants to pass the hot potato into the hands of the next government, which has been the tactic of all governments in Greece since 1974. The majority of them did not solve the problems but simply transferred them to the next government. Then that bubble burst.

Holding the municipal elections and the elections for Members of the European Parliament under these conditions will once again drive the citizens to give their protest vote by supporting the extreme political forces. In general, the situation is "explosive". On the one hand, I do not see how the government could trigger early elections in the first half of the year, during the Greek EU Presidency. On the other hand, I really cannot imagine how the government will manage to stay in power if the results of the local and European elections are so overwhelming that the extreme left parties and the right forces become dominant.

Tags: PoliticsEconomyLiberal partyDrassiKostis LympouridisPolitical instabilityEarly elections
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