Eurobank emphasizes the need to promote public dialogue to strengthen national savings, which is linked to obvious development benefits for the country, honoring the legacy of the Postal Savings Bank.

In this context, at an event organized by the Bank today, a study was presented on SAVING IN GREECE (or why we don’t save), prepared by the professors of the Athens University of Economics and Financed by Eurobank. Declaring the opening of the event, the managing director of Eurobank, Fokion Karavias, said:I have repeatedly argued that the absolute priority for our economy at this stage is investment. A prerequisite, however, in order to maintain an investment dynamic is to utilize all its sources of financing. The situation is positive for the inflow of foreign capital into the country. At the same time, however, it is necessary to increase the level of savings, so that investments are also financed from domestic resources, which offer on the one hand resilience against possible exogenous disturbances and on the other hand reinvestment of returns in Greece and maintenance of a virtuous investment cycle. From this perspective, strengthening the savings culture, to which Eurobank also contributes as the successor of the historic Postal Savings Bank, is crucial for the country’s long-term transition to a healthy, resilient and sustainable productive model».

Greetings were addressed by the Minister of National Economy and Finance, Mr. Kostis Hatzidakis and the Governor of the Bank of Greece, Mr. Yiannis Stournaras, in the presence of the Bank’s Management, representatives of the academic community and institutions.

In his greeting, the Minister of National Economy and Finance, Mr. Kostis Hatzidakis, stated, among other things:The phenomenon of low savings in Greece is not current. Even before the financial crisis of the last decade we were saving less than other developed economies – but also in relation to countries that have a lower standard of living. We therefore need a comprehensive strategy to strengthen household savings: By ensuring a robust and competitive banking system and efficient functioning of the capital market. With the development of capital-building pension systems with high yields. By providing tax and other incentives to savers – I recall the abolition of the tax on interest-bearing bonds. By strengthening the economic education of citizens. While of course the state must set a good example by spending what it has and not what it doesn’t have.».

The governor of the Bank of Greece, Mr. Yiannis Stournaras, referred to the causes of the low savings rate of households in Greece and contrasted them with the positive contribution of the public sector to national savings, through the significant reduction of fiscal deficits in recent years.

The low savings of households was mainly attributed to: A) the high percentage of the shadow economy and tax evasion, which favors consumption rather than saving, B) the insurance system, which, with the exception of the recent attempt to create a capitalization pillar, TEKA, for many years it remained purely distributive and with a high replenishment rate, which discouraged private savings, C) the low interest rates on term deposits compared to the rest of Europe, which also discourage private savings, and D) the lack of culture or incentives for private insurance of private individuals’ assets against natural disasters, with the result that Greece presents the highest corresponding insurance gap in the eurozone.

In the view of the Bank of Greece, these are the main reasons that explain the low rate of private savings and also contribute to a large current account deficit. The treatment of these causes with corresponding measures, together with the important reforms that are promoted and strengthen the potential growth rate of the Greek economy, can contribute to the coexistence of high rates of economic growth with a significantly smaller current account deficit.

In his introductory note to the study, the chairman of the Board of Directors of Eurobank, Mr. Giorgos P. Zanias, points out: “Constantly honoring the tradition of the Postal Savings Bank, a timeless symbol of national savings, Eurobank underlines the need for a substantial public dialogue with aimed at increasing savings, which is closely linked to the long-term growth of an economy. As found in the remarkable study, by the three eminent professors of the Athens University of Economics, our country today in terms of national savings is in the last place, not only in the Eurozone, but also in all developed countries and we are all called to contribute to the reversal of the unfavorable of these data. Eurobank, taking the lead in promoting national goals, as it has been doing for the past three years in the crucial demographic field, is starting the effort to develop public dialogue and to strengthen national savings, while it will also try through other banking initiatives to help achieve of this goal”.

The reasons why Greece presents the lowest national savings as a percentage of GDP of all Eurozone countries, as well as of all developed countries and specific policy proposals, were examined in a discussion held by the three authors of the research, professors at the University of Economics Athens, Mr. Sarantis Kalyvitis, Ms. Margarita Katsimi and Mr. Thomas Moutos, with the coordinator of the chief economist of the Eurobank Group, Mr. Tasos Anastasatos. The causes include structural features of the economy, such as the high rate of self-employment and home ownership, high housing costs and, prior to the crisis, the high pension replacement rate that discouraged precautionary saving. Policy proposals made in the research include fiscally neutral tax interventions, as well as a range of proposals to improve financial literacy through information and education and behavioral approaches to encourage participation in supplementary pension plans.