Greece Answer to the International Finance Crisis

(GREEK NEWS AGENDA)  The Hellenic Parliament yesterday voted in favour of the €28 billion support package to shield the Greek banking sector. The concept behind government’s actions was to enhance the liquidity of the economy in response to the impact of the international financial crisis, using the banking system as a means to this end. Through the new law, funding is provided for economic growth, for boosting employment, small- and medium-sized enterprises and housing loans. Last week the European Union gave its approval, confirming the conformity of the draft with the respective European policy. After the European Commission’s green light, Finance Minister George Alogoskoufis carried out limited corrective changes to the bill, so as not to stir illicit competition between the banks of different countries. These changes are: Public guarantees can only last up to three years instead of five; the same reduction will be applied to public sector bonds. In addition, banks included in the €5 billion capital base support package will not be entitled to distribute dividends to their stockholders for as long as they partake in the plan. Ministry of Economy and Finance: The plan for enhancing liquidity in the Greek economy & The Draft Law & The Greek Economy at a glance ; Hellenic Bank Association: www.hba.gr European Commission: A quick guide to the EU’s response to the financial crisis