Venizelos doubles state guarantees to lenders

first_img Facebook Twitter: @NeosKosmos Instagram The Minister for Finance, Evaggelos Venizelos announced this week that he will extend state guarantees to its lenders to 60bn from 30bn euros to relieve liquidity strains deepened by the nation’s economic turmoil. Venizelos has announced the doubling of anticipated guarantees to Greek banks, at the request of the Bank of Greece, during the discussion on the relevant legislative bill at parliament’s financial committee on Monday. As a consequence, another 30bn euros will be added to the 30bn euros anticipated under the initial arrangement, by 31 December 2012. “This is a message to Greek depositors that there is absolutely no problem for the Greek banking system’s stability within the euro system,” Venizelos said. He said that raising state guarantees to banks had nothing to do with recapitalisation local lenders will need after a Greek debt swap programme is concluded. Shut out of wholesale funding markets since the debt crisis erupted last year, the country’s cash-strapped banks started using a 30bn euro scheme set up earlier this year under which they can issue bonds guaranteed by the state to use as collateral to raise funds. Until now, the scheme had been effectively frozen due to the ECB’s low appetite to take on more Greek debt as collateral for funding. Instead the banks have begun borrowing from the central bank, the Bank of Greece, with ECB blessing as strains on the banking system intensify. CRITICISM Venizelos also announced that all obstacles on the publication of the names of big debtors to the state will be removed after next Friday He also criticised the Radical Left Coaltion (Syriza) by accusing its MEP, Nikos Hountis, of deliberately causing a problem in the country with his questions to the European Commission, particularly with regard to the agreement between Greece and Switzerland on cracking down on tax evasion. Venizelos assessed that the programme that will accompany the loan contract will be signed in January, in the best of cases. “There are no party expediencies and conflicts now, apart from the expediencies of the country. And nobody can play with them,” he said. Source: Athens Newslast_img read more