By E. Sakkelari
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EU Commissioner Pierre Moscovici pointed to “bad debt” plaguing Greece’s four systemic banks as the main priority that the country must now tackle on the economic front. Moscovici, among the Tsipras government’s biggest “cheerleaders” at the European level, returned to Athens this week for talks with Greek leadership.
He specifically cited the need to reduce NPLs and to establish another framework for protection of primary residences from creditors, given that that last such framework has now legally lapsed.
Among others, on Wednesday the French economic affairs commissioner met with Finance Minister Euclid Tsakalotos and a handful of other top ministers.
Beyond generalizations and short-term goals, Moscovici called for a clear “road map” by the Greek side, in order to allow for a return of SMP and ANFA profits generated by Greek bonds held by the European Central Bank and other Eurozone member-states’ central banks as collateral.
The state of the thrice bailed-out country’s credit and financial sector is expected to be the primary focus of a pending “enhanced supervision” inspection by creditors’ auditors next month.
Along those same lines, Bank of Greece (BoG) Gov. Yannis Stournaras reiterated that lack of progress to substantively cut “bad debt” causes jitters in markets and generates instability, in terms of banks’ share prices.
Stournaras, who spoke at the same time as Moscovici’s visit to Athens, told an audience at a Piraeus Bank event that the emphasis should be on the accelerated implementation of two plans to cut NPEs, namely, one by the Hellenic Financial Stability Fund and the finance ministry, and a second initiative by the BoG itself.
In brief comments to reporters, Stournaras said the first plan should first be implemented, followed by the proposals set forth by his central bank.
