Greece is eyeing the creation by mid-2018 of a state development bank that would lend to small and medium-sized enterprises (SMEs) to aid the recovery from its long economic crisis, government officials said on Monday, according to the following Reuters report:
SMEs represent more than 85 percent of companies in Greece, according to some assessments, meaning they are a key driver of economic growth, but they have been starved of financing by commercial banks, which are loaded with bad loans.
“Our aim is to free up the liquidity which is trapped due to the high load of non-performing loans and to boost the network of partner banks,” a high government official told Reuters.
Years of austerity have left people and enterprises struggling to repay their lenders.
The government council for economic affairs is expected to deliberate the development bank’s structure later this month, the official said, and the government aims to submit a draft law to parliament in September.
Greek authorities have sought technical support from the World Bank and European institutions, two officials disclosed.
The bank is likely to be jointly managed by the finance, economy and energy ministries and the government is exploring whether funds from the public investment budget can be transferred to the new lender, one ofthem added.
Foreign development banks have also expressed an interest in participating in the project, one government official said.
An initial plan to set up a development bank has already been decided by Greece’s euro zone partners.
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Source: Reuters
