The banking measures announced by Greek Prime Minister Kyriakos Mitsotakis during the recent budget debate will officially come into force in mid-January, National Economy and Finance Minister Kostis Hatzidakis confirmed on Monday.
The regulatory framework for these measures is expected to pass through Parliament this week. However, Hatzidakis noted that a short grace period will follow, allowing banks to prepare their systems during the holiday season. This adjustment period aims to prevent technical errors and ensure a smooth implementation.
Government Initiatives to Reshape Banking
During his announcement, Hatzidakis highlighted the government’s ongoing efforts to reform the banking sector and broader financial system since the elections. He outlined nine key initiatives, including:
- Strengthening the IRIS direct payment system
- Establishing clear regulations for loan management companies
- Reducing non-performing loans
- Advancing bank privatisation, which has drawn significant international investment and brought €3.5 billion in revenue
- Supporting small and medium-sized enterprises through the Hellenic Development Bank
- Encouraging the creation of a "fifth banking pillar" to bolster competition.
Contributions from Banks
Hatzidakis also acknowledged actions taken by Greece’s systemic banks, such as:
- A €50 million donation for recovery efforts after Storm Daniel
- Freezing mortgage interest rates, a step unique within Europe
- Participating in the establishment of the fifth banking pillar.
Key Banking Reforms Unveiled
The measures announced by Prime Minister Mitsotakis include sweeping reforms aimed at improving transparency, reducing costs for citizens, and addressing housing market challenges. Key points include:
- Zero Charges on Basic Banking Transactions: Fees for essential banking operations, such as payments, will be eliminated.
- Cap on Wire Transfers: Transfers of up to €5,000 will be capped at €0.50.
- Increased ENFIA Tax on Unused Properties: From 2026, properties held by banks or servicers that remain off the market will face double the ENFIA property tax. This aims to alleviate rent hikes.
- Lifting Restrictions on Credit Providers: To encourage more lending, previous limitations on credit providers will be removed.
- Financial Support for Education: The four systemic banks will collectively contribute €100 million to fund school renovations and construction under the "Marietta Giannakou" program.
- Real Estate and Leaseback Initiative: An additional €100 million will fund a new real estate acquisition and leaseback body.
- Expanded IRIS Daily Limits: Daily transaction limits via the IRIS system will rise to €1,000, while charges for loading prepaid cards with amounts up to €100 will be eliminated.
- Consumer Tools for Banking Costs: Citizens will be able to compare deposit interest rates and bank commissions on a new Bank of Greece platform.
These reforms reflect the government’s commitment to addressing citizen concerns about banking costs and accessibility while fostering economic growth and stability. As the measures roll out, they are expected to reshape the banking landscape in Greece, offering greater transparency and fairness for consumers.
(Source: Amna)