Greece’s government is seeking out additional systemic solutions for the banks’ bad-loan problem, beyond the state’s Hercules plan, Finance Minister Christos Staikouras revealed. His comments came after Bank of Greece Governor Yannis Stournaras said that Hercules is a step in the right direction but is not enough.

«We are open and already looking for other, realistic, innovative and effective systemic solutions, » besides Hercules, Staikouras said in an interview to Bloomberg, adding that Greece will eventually manage to shrink the nonperforming loans ratio to below 10%.

Stournaras had referred to the need for a more holistic solution that would also tackle the problem of deferred tax assets, reintroducing the BoG proposal that was not submitted for approval to the European Commission.

Bloomberg noted that Greece, which had an NPL rate of 39.2% at the end of June, has the highest ratio in the eurozone. The Hercules project is seen reducing NPLs by €30 euros thanks to the collateral of €9 billion euros it offers.

Staikouras also told Bloomberg that Athens is negotiating with the country’s creditors about the use of eurozone national central banks’ profits from Greek bonds (SMPs and ANFAs) for investment instead of cutting the national debt.

Original Story: Ekathimerini | Eirini Chrysolora
Photo: Photo by Markellos P. from FreeImages
Edition: Prime Yield