Alexis Tsipras said that many EU leaders recognize the need for Europe to create its own institutions to deal with problems, instead of relying to outside help such as the IMF.
Speaking to the press before the second day of the EU Summit held in Tallinn, Estonia, the Greek premier acknowledged that there are different views on the subject.
However; he added that “everyone understands the need to move quickly and make brave decisions by 2019”.
Tsipras noted that the EU has learned its lesson from the recent economic crisis, and realizes that the EU institutions have not responded in an effective manner.
“Even countries who in the past thought that it is inconceivable to have a support program in Europe without the presence of the IMF, spoke of the need for Europe to create its own similar institutions so that it is not necessary to invite foreign institutions to support our own needs,” Tsipras said.
According to ANA-MPA sources, Tsipras was also due to present Greece’s proposals for social Europe based on growth, rather than austerity.
The European Investment Bank (EIB) said it will invest 350 million euros in Piraeus Bank covered bond next month as part of efforts to increase small business lending in Greece.
This will mark the first time that an international financial organisation has invested in covered bonds issued by a Greek bank since the country’s debt crisis began in 2010.
Piraeus Bank, Greece’s largest lender by assets, plans to issue a five-year 500 million euro ($590 million) bond.
“The transaction demonstrates the group’s reinvigorated support for companies across the country seeking to expand,” the EIB’s president Werner Hoyer told reporters in Athens on Friday
Small business forms the backbone of Greece’s economy which has started to recover from a multi-year deep recession that shrank it by a quarter and drove unemployment to record highs.
Hoyer said the funding will allow firms in tourism, manufacturing and services to generate jobs in Greece, where a jobless rate of 21.1 percent in the second quarter remains the highest in the euro zone.
EIB believes the bond placement will help Piraeus Bank to diversify its funding sources and boost its lending capacity, while also sending a signal of confidence.
Credit Suisse is the dealer manager of the issue.
Under the deal, Piraeus Bank has committed to fund 700 million euros of new investments by small and medium-sized firms across Greece, EIB officials said.
The European Investment Fund (EIF) will buy another 50 million euros of the bond, with the European Bank for Reconstruction and Development (EBRD) also providing financial backing.
Hoyer, who launched a new EIB office in Athens, said the group was on track to reach financing of 2 billion euros in Greece after a 1.0 bilion euro credit line for small businesses launched with four Greek banks in December.
The EIB is the long-term lending institution of the European Union, owned by its 28 member states.
Diminished economic freedom
Greece has dropped 27 places in the latest Economic Freedom of the World report compiled by the Fraser Institute think tank in Canada, falling to 116th among 159 countries, just days after learning it had also sunk on the World Economic Forum’s Global Competitiveness Index.
The findings of the Economic Freedom report, presented on Friday in Athens by the Markos Dragoumis Center for Liberal Studies, were heavily influenced by the imposition of the capital controls in 2015, the center’s officials noted, though many of the Greek economy’s negative features recorded are more deep-rooted.
Economic freedom means fewer regulations and more flexible labor relations, and the countries with the highest readings happen to be those with the best economic conditions.
Greece is rock bottom among the 159 states in the size of the state, garnering just 3.42 points on a scale of 1 to 10, where 10 signals maximum economic freedom. The reason for this is that many enterprises continue to be state-controlled and the ratio of taxes to incomes is particularly high.
This country also ranks very low (121st) in terms of regulatory environment, as it is seen to have too many regulations in the labor market and entrepreneurship that restrict economic freedom. Among the subcategories in this domain, Greece scored particularly low regarding administrative requirements for business activity (i.e. there is too much bureaucracy). Other factors that weighed on Greece’s score are its overregulated labor market and the phenomena of corruption and favoritism.
The latest report, which is based on 2015 data, placed Greece a relatively high 47th in the operation of its legal system and the protection of property rights, with a 5.98 score – the only field where there was an improvement from last year’s report. However, Greece ranks low in the legal execution of contracts and courts’ impartiality.
In terms of currency stability, Greece’s marks dropped from 9.70 to 8.35 due to the imposition of the capital controls in 2015, placing the country in 87th spot. It scored 7.64 points in freedom of international trade.