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It is impossible to request an approval of a referendum on a rescue plan, for which no details are disclosed and no one knows where the money comes from, commented John Charalambakis on the recent events. He is a Chief Economist at BlackSummit Financial Group and a Professor of Economics at the University of Kentucky. He also stressed that another weakness of the referendum on whether Greece should benefit from the second bailout of € 130 billion and the 50% haircut of the foreign debt is how well people would be informed about the consequences if the agreement of October 27 this year were not met. The country not only would not be able to pay pensions and salaries, but also it would have to declare a temporary suspension of payments, which might fatally disturb the foundations of the euro area.

Charalambakis was one of the many financial experts who spoke at the banking conference Greek Banking System: Finding the way out of the eye of the cyclone. Analyzing the economic policy pursued so far, he stressed that all decisions taken from early summer until now in connection with the Greek debt crisis have only deepened the country's obligations. He said that these decisions had taken Greece to a deeper debt, which turned into a trap of no escape. From this perspective, the economist suggested that Greece should resort to a new option that has not been subjected to a formal public debate: a moratorium on foreign debt interest payments.

According to John Charalambacis, this option would enable Greece to zero its foreign debt for 10 years because the country would save € 20 billion each year, and private investors would receive the full amount of investments in Greek government bond funds, without the interest. This scenario would make the debt manageable and the country would not have to sell any assets to reduce its obligations to private and institutional investors. Furthermore, such a moratorium would not be considered a credit event and CDS insurances on the Greek government bonds would not be activated.

The idea of ​​a moratorium on the Greek debt interest payment seemed unrealistic to Charalambacis’ interlocutors and Nikolaos Georgikopoulos, fellow-consultant in finance in the Centre of Planning and Economical Research responded sharply. He said that taxpayers in Europe, crediting the country in the past almost two years and still unaffected by the debt haircut, would not adopt such an idea. Asked by the Greek economist Georgikopoulos from where the creditors would find money to cover the losses from unpaid interest his colleague from the University of Kentucky said emphatically that it was easier to incur the loss of interest instead of the principal.

Despite the dispute, all economists have agreed that Greece needs a quick and effective way to flow fresh funds in small- and medium-sized enterprises, which are considered the backbone of any economic growth. The proposal to decrease the Greek government bonds face value by half and the political instability in recent times are obstacles to solving this issue. Nikolaos Georgikopoulos was clear that the moment part of the agreed recovery reforms is completed and the prospects of the country become clearer there would be funding. "Economic growth and new jobs are always the result mainly of small and medium enterprises," said John Charalambacis. He said that in times of crisis, the state should provide a type of guarantees in which companies could find funding or create a development bank similar to the German KfW.

Until the time comes to establish a new development bank, Greece has a more serious problem and it is to put down the debt crisis. The general opinion is that the local financial system will be able to obtain the lost funds from debt restructuring from the financial stability fund. The price for this "salvation" would be nationalization. Georgikopoulos changed the old comments of the President of Alpha Bank Yannis Kostopoulos, who had said several years ago that Greece actually needed two banks and a half. Georgikopoulos said that after the financial system restructuring, the country would have not more than five banks. He said particularly for GRReporter, that the Greek banking offices in the Balkans could expect a change in ownership as a possible scenario to fight the lack of liquidity. However, he refused to make an accurate forecast of when, how and under what conditions this would happen.

Recent decisions on debt restructuring would certainly change the balance in the long anticipated friendly merger between Eurobank EFG and Alpha Bank, said the financial expert of Ernst & Young. The deal was announced before haircutting the debt held by private financial institutions by 50%, known as PSI + (Private Sector Involvement +). The speed with which the new conditions became known did not allow the banks to prepare another plan and the merger may not take place.

Markus Krall, who is a Senior Partner of Roland Berger, attended the discussion on the future of the Greek banking system. The global risk management company was the first that gave the idea of ​​the Eureka plan under which the Greek state should deliver public assets worth €125 billion to an independent commercial organization, which under the supervision of the European Central Bank would deal with the privatization of local businesses or sale of property. Revenue from these transactions would go immediately to repay the foreign debt, which by 2026 would be close to 60% of GDP.