The message that the Greek economy has entered a path of sustainable development was sent by the CEO of the Group Alpha BankVassilis Psaltis speaking at an event of the Association of Industries of Central Greece. Participating in a panel of the event on “Development Investments”, together with the president of SEV Spyros Theodoropoulos, the vice-president of the European Investment Bank Yannis Tsakiris and the general secretary of Industry, Vicky Loizou, Mr. Psaltis expressed his belief that the positive course followed by the Greek economy “is not an opportunistic phenomenon”, underlining that “Greece has entered a path of sustainable development”.

In particular, in response to a question from the moderator of the panel, journalist Ilias Siakandaris, the managing director of Alpha Bank confirmed that the momentum of Greek manufacturing is maintained, pointing out that this is also proven by the demand that exists for financing new investment plans. “Alpha Bank, as the bank of entrepreneurship in Greece, believes in the development perspective of Greek businesses and stands by their side” noted Mr. Psaltis, a fact, as he said, “is confirmed by the continuous expansion of our business book as the period 2021-2023 our net credit expansion to businesses amounted to 5.2 billion euros and, in fact, despite the strong flow of repayments, which in 2023 alone amounted to 6.8 billion euros”.

Regarding the criticism of delays in the disbursement of TAA funds, he explained that “the fact that in the first period there were mature projects that entered the program en masse, created a feeling in the world that this will continue. We must realize, however, that investment projects have a long incubation period… the bottom line is that Greece has a guaranteed flow of money into the economy for at least 2 years after the program.”

The financing of the economy and interest rates

Mr. Psaltis also made a special reference to the financial conditions that prevail in the Greek economy, underlining that there is intense competition between banks, especially with regard to business loans. Regarding private loans, he commented that mortgage interest rates are currently more competitive than the rest of Europe, as in Greece the average interest rate offered for a fixed interest rate up to the first 5 years is 3.42% compared to 3.93% of the European average. In addition, he emphasized that banks offered significant support to consistent borrowers by freezing benchmark interest rates (EURIBOR) from May 2023 at 2.80% for all their floating mortgages until May 2025, which led to the benefit of around 300 million euros for consistent borrowers.

Regarding deposit interest rates, Mr. Psaltis stated that the difference with the European average is around 50 basis points and is mainly due to the fact that 70% of the deposit base of Greek banks (compared to 60% in Europe) consists of small personal balances for daily transactions. Above all, however, he highlighted the need to inform citizens about the new savings products offered: “Banks must educate their customers that deposits are not the right savings tool that will ensure a private individual a retirement fund.” In this context, he noted that banks are offering new very low-risk investment products with yields of 3%-5% that are embraced by citizens as, at system level, 6.5 billion euros have already been invested, while an additional 4.5 billion euros have been placed in Greek Treasury Bonds.

In fact, he announced that in the coming weeks Alpha Bank will present, within the framework of its strategic cooperation with UniCredit, a new range of investment products.

Capital Markets Union to boost innovation in Europe.

Having repeatedly emphasized the need to change the country’s production model, Mr. Psaltis explained that the high risk involved in research and development (R&D) investments makes financing through banks impossible, as they are subject to supervisory requirements and are based on citizens’ deposits. Therefore, in order to support the first phases of such an investment, the intervention of some public or European organization will be needed that will be able to guarantee until the maturity of the new technologies, as was done with Renewable Energy Sources (RES). At the same time, he pointed out that the creation of a Capital Markets Union (Capital Markets Union) will offer more opportunities for companies to strengthen investments in innovation, providing them with the necessary capital to take on greater risk.