Banking Sector Rejuvenation and Credit Expansion Influence of the ECB central monetary policies

Anastasios Anastassatos, General Secretary, Ministry of Finance of the Hellenic Republic

Kerasina Raftopoulou, Former Head of Enterprises Division in Agricultural Bank, Member of the Secretariat of the Economic Policy Department of SYRIZA and Head of Finance sector.

Chair: Stamatis Zacharos, Managing Editor, Capital.gr/”Kefalaio” Newspaper

Anastasios Anastassatos, General Secretary, Ministry of Finance of the Hellenic Republic

I wish to inform you on the last data and how this affects the Greek economy.

ECB – security loans / decision last Thursday – accelerate inflation as one of the tools to deal with the economic situation.

We have stable interest rates but it is important that banks have the obligation to channel the money into the real economy.

It takes the ECB one step towards easing the regulation. The last step would be to purchase state bonds. What is taking place in effect is printing of money.

Draghi – policy of the ECB for loans (classified) but the size of the programme is still not known. What the measure will do is that it will increase the liquidity of the bank by 1 trillion. Greek and Cyprus banks are liable to access this programme.

If we consider this, especially if Greek banks have uncovered 4 billion loans but not with high risks, this will affect the situation.

The ECB will carry out this in October.

Not surprising is the low response by banks but in the case of Greek banks an expansive monetary program has a lower cost. It is linked to the level of employment.

How then to reinforce the demand of the local market. As long as the productive basis of the country is weak, any higher demand would mean merely consumption which leads to further imports and therefore aggravate the balance of payments.

In the last auction only 50% of the bonds were taken in by banks and if they do not channel money into the real economy, then they will have to give them back in two years. Which shows that economic activity is important.

We see economic activity has improved somewhat and yet there are uncertainties which affect investments. There is fear of elections / political risks.

Agreement for servicing the debt of the country – banks are involved with rate hovering at minus 3%

Health condition of the system has improved.

The four banks have a liquidity around 70% (check this figure).

These four banks have undertaken to readjust for financial stability in agreement with the EU: e.g. number of branches, number of employees, foreign assets, ordinary and extraordinary numerations.

Problem the banks - they have a very high percentage of bad debts. We have not seen the final point in how this situation can be rectified.

On the one hand, the banks continue with a restructuring towards a healthy balance, but on the other hand most of those who go to the banks for loans are high risked business people who are not the ideal clients.

At governmental level, there is talk about 77 Billion Euros in bad loans and therefore a very unstable condition which could be ruinous if made even more unstable.

Restructuring should be take care of people who suffered a lot and should have a second chance, but must be careful not to subsidize bad loans and unhealthy activities. Channel money only to healthy activities.

Show prudence.

An additional problem which banks face is the cost of spread costs.

553 base units in terms of spreads.

The Greek system depends on the Euro system for liquidity. Dependency in terms of 30 Trillion (?)

Triple A – grading will liberate some deposits which are hesitant to make direct investments.

All this through the ECB.

We need to reduce uncertainties.

Following factors help: political stability, exit from public debt repayment scheme, government remains focused on reform program to improve structure of public administration and of the market. All this is necessary to ensure high sustainable conditions for growth.

It is the time we step out of the automatic pilot and we try to land the plane.

We have to work to a visionary Marshall Plan.

Kerasina Raftopoulou, Former Head of Enterprises Division in Agricultural Bank, Member of the Secretariat of the Economic Policy Department of SYRIZA and Head of Finance sector.

Is there really a change in the political climate and are we really exiting the crisis?

Bank restructuring and credit extension – we will necessarily talk about this in the context of a persisting problem of unemployment, low level of GDP, and this in relation to the following two factors:

Gross investment of fixed capital
Private investment which is negative

Banking sector needs restructuring, but to do so it has been recapitalized by the Greek state. As a result we have now four banks. Out of this follows, if entrepreneurs (and banks are enterprises) are being paid, then those who pay (i.e. the tax payers), they should get a return. But we have a drop in deposits – 161 Billion down from 260 billions.

There is another worrying trend: after 12 month of financing the balance of the companies, we know also that credit extension is negative (95%).

Oligopoly condition prevail now which eliminate alternative options to deal with the crisis.

The over concentration is a problem since at risk are companies with payment delays. That is one of the key problems (and affects as well the relation of SMEs to banks).

Study by Bank of America – figures quite accurate.

Banks put pressure on borrowers to have collateral coverages.

Thus Greek banks have difficulties in financing Greek entrepreneurs, so again another reason to take on collateral coverage.

High interest rates – the interest rate margins has reached 4% whereas in other countries they are around 1 to 11/5 %

Minister of Development stated that subsidies should be given to young entrepreneurs, but why not reduce the interest rates for all? Also she does not understand why those who cannot pay, have to pay more. It should apply to all companies.

Let us see how Greek banks are financed: short term lending – bonds are evaluated by rating agencies – well below normal value -Draghi decided to do something about this for it seems that panic has gripped him.

We have March 15, 2015 ahead of us since then the ECB will not accept any more Greek banks as collateral for Greek state deficits. Greek banks have after that date not the sources to obtain bonds. The government can obtain from the four banks something, but it will be very limited.

Hair cut for Greek and Cypriot banks has to be altered.

Problem is linked to the austerity program.

Over debt poses a series of problems including letters of credits.

I leave you to judge what Draghi will do.

I wish to repeat what Tsipras says: need a development bank to have more leeway.

Mediate between borrowers and lenders.

Deal with over indebtedness of companies – presently banks will decide who is a viable company, who is not but this may be only due to the client having a good collateral and who is also willing to pay back in time. (Implies what is good to the bank is not good for the system) – but what happens with fore closure and to those companies which go bankrupt.

Comment:

Dealing with debts is never easy. Already Jeffrey Sachs advised some very fine financial engineering will be needed, if different kinds of debts are handled in a way that they can be resolved in a good way. He even cautioned this might not be a simple method but would require getting literally 'dirty', politically speaking. He had in mind the example of how the City of Detroit has been salvaged more or less. (see Getting Greece back to economic growth - advise by Jeffrey Sachs)

From quite another angle, it has to be added that no good solutions are brought about if practical and ethical principle are ignored. Ideally the handling of debt should be done without burdening the overall economy, and more importantly society. Obviously even when leaving Idealism aside, finding good solutions has not been the case in Greece. To seek relief from the outstanding debt, banks were rescued with tax payers having to shoulder the major burden. They have to face not only an increase in all kinds of taxes, but they suffer as well cut backs in wages and reductions in their pensions.

However, the Economic Forum never addressed the social injustices from this ethical standpoint or from a sense for social justice. Rather all of this was covered up by use of one single term, namely 'sacrifices' which the people have made during the last five years. Instead, the focus was on the following:

Influence of the ECB, central monetary policies and current circumstances in the EU / global economy:

Leaving out the ethical dimension i.e. question of social justice, makes any approach to the economy be one side. The matter of redistribution of wealth cannot be resolved if politicians are unwilling to limit the power of those who tend to become even more powerful. Instead Greek politicians in power seem to cater constantly to special interests. It leaves a certain track record as far as ownership of property is concerned, and shows itself in what role foundations e.g. Niarchos, Onassis etc. play.
The monetary approach to policy reflects itself an ongoing crisis due to what economic theory politicians have adopted to handle questions of the economy. For too long the growth only orientation was based on just that assumption: how to maintain the circulation of money with regulation possible via alterations of the interest rate. It gave extra and more power to the banking system and left many other problems unspecified as if it was not possible to talk realistically about current and developing state of affairs without reducing necessarily everything to the 'economy'.
The dominant economic agenda left everyone talking only about the consumers. Ideologically it resulted in the fictitious creation of the consumer being the apparent sovereign over everyone else, including the citizen of democracy.
All this, and more so the monetary policy orientated, led to reduced government involvement in the economy. Called the death of Keynesian theory, it followed ides propounded especially by the Chicago School with Milton Friedman a leading theoretician.
Economic policy was designed for upholding consumer optimism and appraised accordingly. When the housing bubble and many virtual markets collapsed, it began to dawn on some economists that this consumer behaviour was upheld at all costs. In retrospect, it was revealed artificial inflation of money undermined in the end the purchasing power and provoked the crisis. Its first warning signal came in 2008 when the Lehmann Brother scandal erupted and not only Wall Street was put in a state of highest alarm. Many readjustment programmes since then altered the relationship between Central Bank and the various banks due to monetary governance being in fact a way to lend money.
In Greece, entry into the Euro zone had meant, for instance, to gain access to cheaper loans. Even more so lt led to discard prudence or an old Greek habit, namely to buy only what can be paid for immediately i.e. by the money in the pocket. Accepting credits and loans made many people but also business people forget about the need to be prudent. Clearly they did not take into account that in future not everything shall always be just going up.
How it came to a collapse in the housing sector can be explained. At first, ever more people realized they can construct houses and then be sold at a profit. The only problem was that the builder took credits from the bank to construct these houses in the expectation he could repay the loan in time. In turn, people who bought these houses, they took up likewise a credit, and this very often from the same bank which had lend the builder money under the condition his clients would come to the same bank for credit. In reality, it was the construction of a virtual card house ready to collapse once loans could not be repaid in time because the buyers could no longer afford the higher prizes of the houses. In turn, the builder failed to realize the promised profits needed to sustain an ever higher standard of living e.g. not a simple apartment but a four bedroom villa with swimming pool, and to pay back the loan to the bank.
All this fraudulant businesses - speculation on future profits - go hand in hand with usual stories being narrated and suggested in the media as to what leads to 'success.' They are linked to highly paid football or movie stars who can easily afford not one but four different villas in various parts of the world, including one on a Greek island like Tom Hanks. Needless to say, he has a villa vis a vis Despotika, an island with rare archaeological excavations and therefore under both environmental an archaeological protection i.e. no one can build on that small island. So the villas just across the water have a beautiful view but they are constructed like any urban grid to be found in a suburbanian area of Los Angeles. On top of it, the villas have a double garage on an island which consists of only one road. It underlines something of the absurd, but consumption of space to make money is also a violation of the enviornment with all the consequences now having become more explicit in the form of 'climate change'.
Greece catered deliberately to this higher income class and wanted even to venture in the direction of special clients who love to play golf in different, equally exotic places in the world. Naturally the idea to construct golf courses in Greece was completely absurd, given the Mediterranean landscape not known to uphold grass especially during the long and hot summer months. Luckily enough there was sufficient opposition to scrap these plans. But ever so often there come some clever guys who suggest to politicians in office some clever way to make money with a promise of jobs for the local population as the best way to white wash what happens in reality, and to silence any opposition to such projects.
There are more deliberate moves which put the state at the mercy of the rich and powerful, contrary to what was the lesson of Ancient Greece with democracy being only then alive once laws were passed to limit the power of these special classes. The consequences of this could be seen clearly onhand of the disasterous Bush policy which reduced the tax of the rich and thereby created a state deficit. More than anything, it shows to where upholding a monetary policy leads to. For it lands the state squarely in dependency upon big money lenders.
Already Rudi Dutschke had advised at a conference held in Berlin about "no future" (1978) rather than listen to the French philosophers who talk about Deconstructivism, the analysis by Marx of the Asiatic Mode of Production should not be forgotten. By this is meant a state in need to supply its population with expensive technology e.g. an irrigation system for the farmers, but due to not having the funds for such a huge project, has to turn to those who have the money. The state gives them land in return for money. It makes them automatically into the landed aristocracy. Such empowerment of land owners has consequences for the political development within the state.
Once the modern state comes under huge pressures due to a deficit threatening to go completely out of control, it means more money has to be printed as is the case in the United States. It raises the question, but will guarantee in the end the purchasing power of the currency in use? One answer is given by seeing how this false dependency from money having gone basically out of control, it obliges the state all the more to safeguard the banking system, in order to avoid panic i.e. a run on the bank as was experienced during the crash of the New York stock market in 1927. In Europe this fear of devaluation of the currency is virulent especially in Germany due to people there having made that experience twice. They do not wish to repeat that a third time. Yet that fear is little understood outside of Germany and makes the finding of a reasonable combination of fiscal and monetary policy even more difficult.
Monetary policy geared to manipulate solely interest rates to alter income expectations, that is the outcome of the theory advocated by Milton Friedman. He saw that consumers behave not according to their weekly or monthly but in terms of their expectancies on their life long incomes. For example, someone who knows that he will inherit in future the house of his grandmother will spend already now and consume differently in the present in comparison to someone else who has nothing to inherit in future. The influence of Milton Friedman and his school of thought has been having a disasterous impact. It includes the fact that the Chicago boys tried out first their ideas in Chile after Pinochet had ousted Allende from power in 1973 and through a violent and bloody repression made sure that the people would pay the prizes as set by this supposedly free market backed by a dictatorial state.
Paul Krugmann in the United States has been argueing against that policy direction for a long time by now, but politicians don't seem to heed that kind of advice. By adopting a strictly monetary policy line of thinking, governments, and the intergovernmental bodies in Europe have deprived themselves from making necessary experiences with other than monetary and fiscal tools. The sole reliance upon the ECB to calm markets and to further economic growth shows that politicians seem to think that they have no other tools at their disposal. As a consequence of this policy orientation, unemployment remains high.
It seems little can be done to alleviate the economy once subject to a highly problematic development based solely on speculation. Once all decisions are reduced to probability calculations as to what money can be earned off money, then there is no longer any demand for public truth being upheld by society. The writer Robert Musil predicted that this development based on probabilities would lead eventually to terrorism as a most violent way to find out what is the truth in a most evasive world. It should be recalled that companies instead of using money gained for further investment purposes, they started to speculate with that money on the stock markets. Likewise pension funds were not kept in the safety deposit, but contrary to law forbidding, for example, in the UK the use of this money for speculation purposes on housing, that money went abroad to places like Spain and fueled a boom with no real need except to make some extra profit rather than leaving the money be kept idle on some account.
The work of money has elevated much into unrealistic realms with the Trillions of money being circulated way above the head of any ordinary citizen. Still, Draghi and others of the European Central Bank, dispute that monetary in combination with fiscal policy would create a bottleneck for economic growth; instead, Draghi maintains that the lack of structural reforms is the real reason. It begs the question but what is to be understood under 'structural reforms'?
Still the blame game continues between ECB members and politicians in various member states. For example, Eecutive Board member Benoit Coeure believes that the failure to make these structural reforms is what creates uncertainty over the path of interest rates. According to Jana Randow for Bloomberg News (Oct. 17, 2014), he believes this to be the case especially if not coupled with expectations in future economic growth. Yet if economic growth stands in reality for a chance to make 'money out of money', it begs the question so who shall make the investments necessary to sustain the economy? Certainly if banks amount to merely a lucrative business called simply 'making money', then no value has to be added to the real economy. It is anyhow a mystery how the value of money can be created 'out of nothing'. Rather as is the case with the laundry business with dirty money, it seems even the real currency brought into circulation by printing money has to go through a conversion mechanism, in order to gain ground i.e. have the consumer confidence that with this currency something of real value can be purchased. Alone then it takes on real value best measured in terms of 'purchasing power'.
Purchasing power is a specific term in need of further clarification. Interestingly enough Benoît Cœuré, executive member of the ECB board, quoted in a speech he gave in Riga 2014 Say's law stating that:

"the real purchasing power in the economy is about real production!" (1)

He went on to say too often this term is left out of the discussions since people seek simple solutions for complex economic problems. Still, he thinks it is very important to consider that "supply creates its own demand". He goes on to state if one thing has been learned by Europe going through such a deep crisis and economic recession, is that "sustainable economic growth is about both demand and supply." Hence any discussion which focuses only on supply, or demand side, will not do. Of interest is, therefore, if such a position will shape in future economic policy being shaped at European level and adopted accordingly by the member states.
At political level, purchasing power is being referred to but only indirectly. This is especially the case when politicians refer to the sovereign rights of their country as if the best way to determine its own economic course. These arguments prevail in the UK, but are also advanced especially by new protest movements like the AfD (Alternative for Germany). It is not exactly purchasing power but rather a matter of wishing to take fate into one's own hands as if it ever existed fully in the past. Rather it is the cultivation of a dangerous illusion it would be possible to do what one likes without any outside interference, and in the case of EU member states, not to be anymore under the dictate of the European Commission and the ECD.
The reverse is naturally true as well. In the case of Europe, Barroso puts forward the argument that only when the EU member states stay united, then they will have a voice in global affairs. That suggests you have only then something to say, when your economic policy is proving to be successful and you have some weight to throw around on the global market. In turn, it means to have the power to influence developments in the world despite being shaped by forces like trade, wealth, population size, climate change, wars but also what the other players like China are doing.
In economic theory, purchasing power reflects how well vertical and horizontal integration works in favour of making the micro and macro levels compatible with the needs of not just society in general, but of localities, cities and regions making up an entire and unique landscape. The latter is more often defined as the geo-political location having gained in importance due to having access to resources and some competitive advantages over other locations in a world constantly on the look-out how the shift in 'balance of power' will affect the own well being.
At micro level, purchasing power is best understood what disposable income an individual has to purchase things in order to sustain life. It is, therefore, a practical knowledge as to what money can buy or what the individual can afford, given what net earnings he or she has. Naturally economic phases alter this disposible income. Once Greece entered in 2009, the latest in 2010 the crisis, civil servants and others suffered wage cuts (40%). At the same time, they had to face an increase in taxes up to 20%. Consequently they suffered a loss of 60% in their original purchasing power. This tremendous cut in their disposible income (both current and savings, but also in value assests since many owe property but which has been transformed into a burden since now taxed heavily) explains how misconceived was the austerity programme proposed by the Troika and agreed to by the Greek government. For they implemented all of this in the form of crude measures under the pretext of wishing to reform a supposedly inflated administration, but little did they take into account what negative impact this would have on the local economy. With the purchasing power of civil servants diminished, it led immediately to the closure of many small shops as well as of SME's. Such a cut in purchasing power at individual level meant also a change in behaviour and pattern in life. For many, and in particular the well educated and the youth, decided to leave Greece since the rapid increase of unemployed and diminished prospects for a decent life forced them to seek alternatives elsewhere, or they gave up their studios, offices, etc., to move back everything if not into their own homes, then to that of the parents. It amounted to a crowding in on safe places like little islands which had still some income to survive on. It gave further rise to what has become a well known phenomenon, namely the 'social economy' brought about by trying to do away with middlemen done by linking up directly producer with consumer. The linkages thereof are often created by volunteer workers i.e. those not taking any profits. It just shows what adjustments people make during a crisis when there is little money to spare and only those things kept which are really necessary for life. The cut back included no longer buying newspapers but of course few Greeks would give up their cigarettes. The full implications thereof are still not fully understood, although in talk shows such issues are raised such as why cheap Chinese goods can reach the Greek local markets while things produced in Greece are so expensive that only those with disposible incomes can still afford them?
At aggregate level, purchasing power says something about the command a political body governing and overseeing the economy has over so many resources, so that envisioned jobs can be done within a given time frame. It follows when the purchasing power diminishes, something needs to be done to offset this tendency. While only with more money less can be bought, the reverse is that people are forced to work more for less money. To manage this transition or rather change in ratio between work done and payments made, the demand is made for stable conditions. Meant by this is a restoration of the original purchasing power which existed before the crisis set in. Sarte named it a restoration of the original purchasing power which has been lost. It becomes apparent in a crisis when a huge state deficit means the state cannot back up any longer the currency in daily use.
Sartre explains it by linking purchasing power to the complementary terms of concrete and abstract richness. Once the deficit is revealed, the overall backing of the currency is no longer a given since there is no abstract richness. Likewise the currency in one's hand has become meaningless. It is signalled by a massive inflation. Sartre cites as example Spain during the 15th century, when gold was imported and everyone thought the king of Spain was getting rich and along with it the entire country. Thus people started to expand activities and build new estates. But to do that many things needed to be imported and be paid for in gold. Suddenly over night the treasury of the King was empty. Immediately unemployment was created as everyone laid off the workers they had hired. An estate owner who had employed ten farm workers would fire all of them and rehire just one of them who now must do the job of ten men but who is paid just one or the same salary. Consequently this farm hand who cannot do all this work alone has to re-hire the others under sub-contractual conditions and pay them practically out of his own pocket. While the estate owner has with this formula 1 + 9 restored the full capacity of his original work force, he pays but one tenth of what he did originally and thereby has made a real gain in purchasing power. Likewise, so the argumentation in Greece and elsewhere, competitiveness is restored once lower wages are paid and this is made only possible by having not two but ten or more people competing for the job. Along with goes a worsening of working conditions since anyone accepting such a job at a lower wage has also to accept in having no Rights to strike or to demand equal pay.
The political arrangements with the Troika in Greece and the subsequent agreements made between the industrial and social partners aimed at creating such conditions which gurantee a return to roughly the same level of money needed in the past for things getting done. This includes as well a gurantee of returns for the investments made i.e. profits. Naturally there is a huge difference between claims of investments having been made and real investments that ensure a substantial improvement in living conditions and a direct contribution towards a sustainable development. For a lot of investment flows can be described as being merely superficially interested in developing new opportunities, for most of them are made in relation to what happens to the share values of that particular company once it has gone 'public', and thereafter depends upon the good will of its share holders sustaining the profitability of the company. However, if profitability is the sole criterion by which the performance of a company is judged by, then a company is driven in the direction of the need to take ever higher risks in order to ascertain its reputation. That means the company has to reduce costs wherever it can, in order to increase profits. The gain in value can then be passed on to the share holders. There is one way to keep the risk of rising costs low, namely to keep wages stable or even reduce them over time. A crisis is, therefore, a golden opportunity to do so. Sartre has pointed out already the creation of unemployment has to do with a systematic effort to restore the original purchasing power of the currency in use. Hence the question becomes as to what politicians in Greece have done to contribute towards the upholding of the purchasing power for, by and within the Greek economy?
The Greek economy needs to be described in better terms than what has been the case until now. For aside from a diverse interrelationship making up the internal market, there has to be taken into consideration at aggregate level what purchasing power is needed to sustain the economy and society as a whole? One key term was used at the Economic Forum: energy security! Lately due to the developments between Russia and Ukraine, gas supplies are no longer reliable. It has sparked a search for new energy sources even in the Mediterranean despite all the environmental risks such a development entails. But to come back to the overall economy, any society needs not only consumer goods and services by government but also energy supplies to keep the economy going. Alone the amount of gasoline consumed daily to keep companies but also commuters going, says something about the interdependencies between needs and costs of supplies of resources required if these needs are to be satisfied. It is here where purchasing power 'kicks' in when seeing how many ships are needed if Greece is to be supplied with sufficient oil and gas to be able to sustain a complex economy. Even in a crisis, there will be this demand below which things would simply break down. Thus aside from personal consumption, these overall needs tend to create imbalances especially if distortions or even outright losses in the purchasing power are incurred.
As the handling of purchasing power has also to do with transfer of knowledge, and not just profitability of those who have accummulated wealth and wish it to grow accordingly, it is interesting to note what is being discussed 'externally' about the woes of the Greek economy. It does not correspond at all with what is being said and done 'internally'. There are too many discrepancies between potential impulses which could come from external discussions and the real know-how transfer taking place. The lack thereof is internally speaking due to a culture not being open and receptive enough to other ideas which would go contrary to what is defined as 'the Greek way of doing', and which is linked to a nationalist interpretation of 'well being'. Since that has a lot to do with pride as well, it is amounts to a mix of inferiority and superiority which together make it nearly impossible to accept criticism and to level in a sober way with stark reality. Practically it means purchasing power, once linked to how far ideas can go to reform and to alter not only the economy, but what goes with it in terms of education and socialization, becomes a void once it has been proven even the best ideas have no chance to go anywhere. It is as if no intellectual investment can shape internal perceptions and reflections, so as to sustain discussions which correspond to international debates. As this has to do with the setting of standards, and here the Greek word 'metron' Presumably this has to do with the degree of leeway when it comes to implementing policy measures in Greece. Too often it is done without any proper resource allocation. Reflective of that is an over consumption of everything, including of ideas and experiences. There is no feed-back given and hence for the outsider the landscape appears as if full of quick sand and in which anything can disappear without leaving a trace. That can also be observed at memory level.
What strategy exists to keep money within the economy (flow of payments / debt / pressure to externalize) - a remark made by the mayor of Wroclaw at the Cultural Forum in Brussels indicates this interest in keeping any money which has come into a local economy circulated as often as possible before existing again. This policy approach can be linked to a theory developed by Richard Florida who recommends a city should attract the creative class. They would not only make the city into a creative one i.e. highly innovative, but as well help increase the value of real estate. This need to become attractive and able to maintain at the same time a flourishing economy at local level has made many cities look into means to lure visitors to stay in their hotels for more than just one day. In Athens an improvement was noted after the Olympic Games were held in 2004 since then visitors have started to stay instead of the usual 1 1/2 days an entire week. Of interest is likewise that international artists and others are now coming to Athens out of the belief that the city has become more exciting. Compared to what a city like Berlin used to offer, namely economical spaces for artists to experiment, Athens seems now to offer some better opportunities. Even while Greek artists cannot afford to rent existing spaces, these international artists and designers can easily afford such prices. Their duration of stay may be as a long as three years or even more.
At the Economic Forum it was briefly mentioned, the creative sector offers new opportunities. The argument goes this sector did better, comparatively speaking, than other economic sectors in terms of employing people and contribution to the GNP (around 7 tp 10%). It indicates what can alter already during the crisis and more so in the post-austerity phase when some things start to pick up again. A best reflection of that is the increase in tourists which come to Athens and the number of performances taking place every night. Through-out the week all sorts of things are happening in theatres, off-scene spaces, galleries, cafes etc. For one key attractive factor has to be a kind of liveliness so that people say to each other in Athens something is happening. Alone that fuels curiosity and interest. Of interest is that DOCUMENTA will for 2017 have as a theme "Learning from ATHENS". Still, the impact of the creative sector cannot be more than its 10% contribution to the GNP and therefore this enthusiasm has to be balanced off with still further going activities and measures needed, if money is to come into the real economy and there stay long enough so as to make possible real investments with a promise of having a liveable future.
the problem of loans and deficits owned by people to banks along with with high taxes so that people face a double burden
inflation / deflation - due to European recession and low inflation, there is a risk to slip into the mode of Japanese economy
macro economic data e.g. exports
To think in terms of a national economy within a European and global setting is in reality outdated but amounts to a fake accountability with no one nationally or internationally taking full responsibility as to adverse impacts of over spending and over lending. As stated before, any economic theory which identifies at macro level only the demand and the supply side without addressing the issue of the purchasing power, is not a realistic assessment. The neutral models advanced by economists and econometricians makes it even harder to keep track of what is happening in both the real and gray economy. At best national economic theory upholds the fiction of state sovereignty while the real decision making levels are not so easily identifiable. For instance, many people in Greece think Germany and specifically chancellor Merkel has more influence over the European Union than the European Central Bank, while at the same time there are sought sources of financial support which lie outside the European Union e.g. America, China, Arabic states etc. At best, there is a distorted view as to which economic policy, if any at all, has a significant influence upon the so called Greek economy when there are open borders with other EU member states, a common currency (with 18 member states out of 28 using the Euro) and major decision making processes being shaped by the European Commission under the sway of the currently 28 strong European Council and its various sub-organisational groups using the method of open co-operation. All boils down to a huge difference between 'directives' and law. The former have to be translated into national law and be adopted by the national parliaments before they can be called properly 'laws'. Altogether the legal framework for a working economy is obscured by no one knowing really how the various contradictory elements within this local-regional-national and European wide framework can be considered an adjunctive of legislative power and, therefore, having the full legitimacy to intervene in cases where imbalances are threatening the entire workings of the economic system. What makes it worse is that Ireland can give tax excemptions to companies which set up their business in Ireland and therefore have access to the European market under the rule of a single market, but which violates the rules of fair competition. As this mess needs to be sorted out, it shows that decisions are made according to another kind of balance of power within the European Union, insofar as the sovereignity of each member state needs to be safeguarded as prime need at the level of the Council, but which does not hold necessarily at the level of the Commission. There the market forces dominate much more since what empowers decision making is really another kind of economic and political thinking.
influence of EU Commission and Troika with regards to banking sector and the risk measure
The crisis brought about bank mergers within Greece with only four major banks remaining, so that it is doubtful if any real competitiveness exists in the banking sector due to the oligopoly situation which has been created.
the deals which have been made before and since the crisis broke out into the open in 2009/2010
lending rates
relationship to the European Central Bank is most difficult to describe since aside from public announcements, there are many more other types of agreements made behind closed doors. Still, the EBC started on 21.10.2014 as stated by to buy up short term bonds from French and Spanish banks, so that they could free their accounts from debts and therefore begin to put money back into the real economy.
practical view: credits there provided those asking for loans know how to draw up convincing business plans
money being consumed while money is made of money: the virtual financial market
e-banking and regulations with regards to also virtual currencies as extension of dated cheques as form of payments
deferred payments and the real crisis being 'morality of payment'
in the wake of the crisis in Cyprus and its impact upon Greek banking sector
how EU sanctions of Russia affect business and financial transactions to the Balkan region
what else is in need of wise consideration for a financial sector to work to the satisfaction of people in need to know how important are savings, investments, and ways of handling money since that is more of a cultural value than a mere economic factor e.g. buy only if money is available versus purchasing on credit – what difference between private consumers and business in need of credits to facilitate transactions?

Ποιειν Και Πραττειν - create and do

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Banking Sector Rejuvenation and Credit Expansion Influence of the ECB central monetary policies