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Event on the Greek Economy in Salonica

Today Eurobank EFG organized an event on the “Greek Economy and Stability Program” in Thessaloniki. The event is part of a wider initiative undertaken since last spring by the Group to present the prospects, challenges, opportunities and threats of the Greek economy and the banking system, to international banks, institutional investors, analysts, private clients and the Greek and international media.
Keynote speaker of the event was the Deputy Minister of Finance, Mr. Philippos Sachinidis. Deputy CEO of Eurobank Mr. Nicholaos Karamouzis opened the event, which attended by about 400 entrepreneurs from the region of Northern Greece.
In his opening speech, Eurobank EFG’s Deputy CEO, Mr. N. Karamouzis, noted: “…the challenge for the final disengagement of the country from the crisis is growth. The responsibility of government is to create the appropriate environment and favourable conditions that will help to accelerate economic growth, and foster entrepreneurship, private investments, and economic openness. This presupposes the rapid decline of state dominance and interference in the economy and the concomitant combating of state overspending, tax evasion and bureaucracy. Through timely proposals and initiatives, Eurobank EFG, has highlighted our country's need for a new growth model, which will not be based on consumption and an inflated public sector, but instead be founded on the private sector, the all-round development of economic openness and the flourishing of private and foreign investments. To this end, we have undertaken a series of initiatives, in partnership with professional bodies throughout the country, including Northern Greece, in order to enhance and support economic openness and investments. It is an effort we plan to continue”.
“In recent months,” said Mr. Karamouzis, “our country has been facing an unprecedented wave of doubt of its credibility, linked to the broader challenge to the sustainability of the Eurozone and the Euro. This climate, despite the consistent implementation of the Memorandum to date, has not changed, thus constantly undermining the future prospects of the Greek economy. Even today, despite the progress that has undoubtedly been made, international markets still believe that there is considerable risk that Greece might be eventually forced to restructure of write-off its debt.” “In any case,” Mr. Karamouzis stressed, “a debt write-off would be disastrous for the country and the economy, with immeasurable negative long-term consequences”.
“The Memorandum”, he said, “is a not necessarily evil, but a necessary policy, which lists and prioritizes all those reforms that our country has not dared for years to promote and sets a strict timetable for their implementation”.
“The new virtuous cycle of social justice will materialize through the achievement of high growth rates, increased employment, and the efficient provision of social wages by the state, based on modern services, reduced spending and the elimination of corruption”.
“It is clear, however, that the focus of government initiatives should gradually shift away from the excessive taxation of tax paying citizens and enterprises to the reduction of public overspending, the improvement of the efficiency of the wider public sector, the fight against tax evasion, and, most importantly, the bolstering of economic growth and private investments. The practice of imposing new taxes and extraordinary tax contributions every time the budget deviates from its targets leads to a vicious economic cycle, weighs upon private consumption, threatens social cohesion and ultimately punishes taxpayers and entrepreneurs”.
Referring to the Greek banking system, Mr. Karamouzis stressed that: “even during these difficult times, Greek banks continue, as their main priority, to support their customers with flexible solutions, while also maintaining a strong capital base. Of course, each bank defines its strategy and undertakes initiatives, based on its own particular facts and features. Further fortifying the banking system, strengthening capital and liquidity, and supporting customers is a common goal for all banks. Nevertheless, the banks alone cannot make a difference. The prerequisite for markets to open, for liquidity to enhance and for the investment climate towards banks and the economy to improve is that the government implements the Memorandum consistently, while undertaking, in parallel bold initiatives to strengthen growth, investment, and economic openness.”
Mr Karamouzis continued: “The goal is to render Greece, at last, an attractive, friendly and competitive place for visitors, investors and entrepreneurs. Despite the adverse conditions, Greek banks remain competitive and internationalized, maintaining a strong presence in Southeastern Europe. The presence of the Greek banking system in the region represents one of the most important investments of the country in recent decades.  For this reason, the international scope of Greek banks and the prospects it entails should not be undermined or weakened, but form the core of the new, virtuous cycle of economic openness, competitiveness and prosperity of the country”.
Since the signing of the Memorandum and the inclusion of Greece in the Support Mechanism, Eurobank EFG has conducted in-depth research and assessment of the economy's potential. The team of Eurobank EFG's Economic Research & Forecasting Division, led by Prof. Gikas Hardouvelis and with the contribution of Prof. Dimitris Malliaropoulos and Messrs Platon Monokroussos and Tasos Anastasatos, developed a comprehensive study on the prospects of the Greek economy. The study describes and analyzes a series of positive factors whose importance international markets has began to acknowledge, but still either underestimates or fails to appreciate. According to the study, the key factors that would allow Greece to exit the crisis include, primarily, the restoration of high growth rates in the economy, as well as the achievement of primary budget surpluses. Subject to these conditions, the debt to GDP ratio could drop drastically to even below 80% in 2020.