Banks reach deal with finance ministry on vulnerable households

Greek banks reached an agreement with Finance Minister Christos Staikouras on the support program for vulnerable households they presented on Wednesday at a meeting held in a tense atmosphere, during which bank heads also discussed their policy on the issue of interest rates on deposits and bank charges.

Despite the agreement on vulnerable households, Staikouras’ statements shortly after the meeting made it clear that the ministry is not satisfied with the banks’ answers on the issue of interest rates on deposits and transaction fees, calling on them to “activate head-on,” as he said.

The minister described the climate in which the debate was held with the characteristic phrase “We were bickering for two hours,” while he declared he was “satisfied” that with regard to the issue of the vulnerable, “the banks reached their limit.” On this matter Staikouras noted that “it is a step in the right direction. We save some, I can’t save more. It is a solution for a number of borrowers, about 30,000,” he added.

Christos Staikouras pressed the banks to proceed by Thursday at the latest with an announcement about the measures they are going to take, implying that if the relevant announcement is not satisfactory, there will be renewed pressure from the government, this time from the floor of the Parliament at the budget debate.

Pressure is mainly focused on the issue of deposits, to the extent that it is a direct measure to support depositors. Banks have started to increase interest rates on deposits, with an emphasis mainly on fixed-term accounts, where interest rates are now between 0.40% and 0.70% – for amounts of 100,000 euros and above – and for a duration of more than one year.

Pending announcements from the banks, the proposal for vulnerable households envisages retroactively subsidizing the rise in mortgage installments by repaying 50% of the increase from last July until the end of 2023. The banks’ proposal provides for subsidizing borrowers who have not delayed their loan installment for any more than three months.