At 2%, it reiterated today that its base interest rate will drop European Central Bank (ECB) in the autumn, from 3% which is today, the governor of the Bank of Greece, Giannis Stournaras. It is recalled that from the stage of the Bloomberg conference last November (11/18) he had predicted that the key interest rate would decline by the end of 2025.

Speaking today on SKAI radio, the head of the Bank of Greece said that “we have made four reductions in the European Central Bank, we have dropped from 4% that was in June to 3%, this is the basic interest rate. The banks they pass it on to the interest rates, they are obliged, and the Bank of Greece monitors exactly this reduction, because the interest rates are variable, so the reduction is mandatory. And I also expect another 100 basis points of reduction, to be close to 2% by the fall of 2025. The borrower will see that immediately.”

On the issue of banks and supplies, Mr. Stournaras noted that “the fees that banks get are not only fees from money transfers, from ATM withdrawals related to the measures, they are also fees from investment banking, from portfolio management so you cannot interfere with them, these are fees that they do for jobs they do. So believe me the measures are correct, measured and priced. Maybe the banks have also fallen a bit victim to their own rhetoric that everything is going perfectly, that they have very big profits.”

He also noted that “they only have profits recently. Of course, they must make profits and to a very large extent their profits are the result of the monetary policy we follow at the European Central Bank. Don’t forget that in previous years they also had big losses.”

“Half of the capital of the banks, precisely because of the haircut of the bonds, because of the red loans, is not paid-up capital yet, it is a claim against the Greek public that they have, this is called deferred taxation. They pay but are offset against the obligation that the public has towards them. So now we want the profits that make up a part of these profits, they must definitely go to dividends because people invested in the Greek banks. The Financial Stability Fund sold shares, we cannot tell the shareholders that you will never get a dividend. So a piece will go to a dividend. A portion of course goes to amortization of deferred tax and one goes to capital appreciation. So they must achieve all three of these together.”