By Chrysostomos Tsoufis

Dear bankers, it’s time to wake up… That was the title of her lead article Belgian newspaper LeSoir on Tuesday, which was commenting on the momentum national initiatives are starting to take from various states in Europe, which are offering investment products to their citizens as an alternative to the very low returns that banks insist on offering theirs.

Reason and occasion for the article, the small miracle performed by the government of Belgium which on August 24 mobilized 600,000 small depositors to buy the 1-year bond it issued. One in 20 Belgians bought the bond and its small country Central Europe collected almost €22 billion which is a record for the country itself but also probably for European history according to the Belgian authorities and is equivalent to 5% of the deposits of Belgian citizens.

The “reconciliation” of a citizen state is a win-win for small depositors and the public.

The former ensure excellent returns, in this case 3.3%, which are a far cry from those offered by banks.

The public it “drops” its borrowing rate since it literally “rains” money and covers a large part of its borrowing needs. Bonus the increase in the government’s popularity, the Belgian MFA Vincent van Petegem has seen its stock rise of late.

To the losers the banks that lose deposits. Of the 634,000 Belgians who bought the “people’s bond”, 400,000 – 2 out of 3 – withdrew money from deposits by sending the money directly from their bank.

Belgium is not alone. Until the Belgian issue, the record was held by Italy, which in June sold a 4-year bond to small depositors, raising €18.2 billion. Italian citizens now hold 9.4% of the Italian debt when the European average is 4.4%.

At the same time the Spanish citizens have in their hands 15% of the interest-bearing promissory notes issued by the Iberian country.

Their neighbors Portuguese covered half of their financing needs this year by turning to citizens.

Our country is also joining the club, timidly, as today ends the period that private individuals have to publicly register through a bank or brokerage firm and purchase interest-bearing 52-week Greek government bonds. The yield is 3.81% and each natural person can contribute up to €15,000 and the bonds after the changes in the legislation are tax-free.

“It is not a popular bond, but we are making a first opening so that depositors, citizens have alternative tools, while the banks are also being pressured in practice” was his comment Kostis Hatzidakis on SKAI radio.

Given that it is highly doubtful that interest rate hikes will stop, it remains to be seen whether banks get the message…