The day after
Fokion Karavias Eurobank CEO
We all know that this pandemic is a unique phenomenon. The turmoil in the global economy is unprecedented, as are the reactions of governments and central banks. At this stage, any predictions as to the duration, impact and resources required to deal with it would be risky.
The period immediately after the acute phase of the pandemic will require a massive response – i.e. a massive liquidity boost for the economy to heal the wounds that are sure to be created, as soon as possible. This is even more true for Greece, as the pandemic found us as we were embarking on a course of growth following the previous, long and deep economic crisis. Today, we see how crucial our choice to remain in the eurozone was, and how the sacrifices were worth it. The participation of Greek bonds in the new buying program is a major addition to the country’s financial arsenal. Think about just how different things could be.
This effort has already begun. Banks are supporting businesses that met their obligations in the past but are now facing difficulties. Similarly, we are also helping those households that have suffered a severe drop in their income. The banking system is in a much better position today than it was a few years ago and can respond to the crisis. Under the current conditions, as the liquidity of international markets decreases, banks will make use of all the tools and credit lines provided by supranational institutions, the European Central Bank (ECB) and the Bank of Greece, to provide the necessary liquidity for the real economy and punctual debt payers.
It is important to focus on helping those in need, not everyone. This means preventing others who may not have suffered as a result of the epidemic from exploiting the crisis by using it as a pretext to avoid their obligations. We must not allow – as the prime minister rightly pointed out – a revival of the nonpayment culture and the creation of a new generation of bad loans, because it will deprive us of the means to fully assist the numerous people who are in real need.
Eurobank made a difficult choice a year and a half ago, which came at a financial cost. We proceeded with the forward-looking reduction of nonperforming loans in a number of ways. Of course, nobody could have foreseen what happened. However, we are now in a strong position, ready to support Greek households and businesses. The day after the crisis, viable businesses will have the loans they need to recover, regain productivity and maintain jobs.