European Commission Vice-President Valdis Dombrovskis warned Athens on Tuesday (27 October) of a possible haircut in Greek deposits in the event that the first bailout review was not completed this year. EURACTIV Greece reports.
During a visit to Athens this week, Dombrovskis urged the government of Alexis Tsipras to push forward reforms in order to complete the first review of the €86-billion bailout agreed with international creditors last summer.
In an interview with Skai.gr, EURACTIV Greece’s partner publication, Dombrovskis said that the recapitalisation of Greek banks should take place after the first review of the bailout deal, and no later than 15 November.
After meeting Greece’s central bank governor, Yannis Stournaras, he emphasised that all agreed to finalise bank recapitalisation by the end of this year.
Under the bailout, Athens is set to receive up to €25 billion to recapitalise its banks.
The European Central Bank is currently assessing the capital needs of the National Bank of Greece, Piraeus, Alpha Bank and Eurobank. The results are expected on 31 October.
Asked what would happen if the first bailout review was not completed, Dombrovskis did not rule out a bail-in for Greek deposits.
“The issue will become more complicated, because then you will need to apply the bank recovery and resolution directive […] which may imply a bail-in,” he noted.
Concerns over tax authority independence
Meanwhile, the former Latvian premier also expressed concerns over the government’s recent decision to dismiss the General Secretary for Public Revenue, Katerina Savvaidou.
The General Secretary is the most senior official in charge of cracking down on tax evasion in Greece. The first “taxman”, Harris Theocharis, was appointed in February 2013.
The position, which has a mandate of five years, is supposed to be independent, in order to protect it from political pressure.
Harris Theocharis, who is reportedly under huge political pressure, resigned in June 2014, raising eyebrows among the EU executive.
Theocharis, currently a lawmaker for the centrist Potami party, was replaced by Savvaidou, who was dismissed by the Greek coalition government last week. A Greek prosecutor charged her with breach of duty for extending tax collection by a year on revenues for television advertising.
Dombrovskis said that during his visit, he also raised the issue of tax authorities’ independence.
“We need to ensure that there is no political pressure on the head of tax administration and that the selection of the secretary general is open and transparent”, he warned.
Dombrovskis sees ‘commitment’ in Athens
In another interview with radio Athens 9.84, Dombrovskis noted that in his visit, he saw a clear commitment of the Syriza-led government to work seriously on implementing the bailout programme.
“The government is willing to stick to these commitments and successfully complete the evaluation,” he said.
“Because there is a general belief that economic stability is a prerequisite for economic development, so we have to restore economic stability in order for Greece to return to economic growth,” he added.