Economy and Banking Sector of Greece

Location Southeastern Europe
Population (2016)10 793 526 ↓ (-0.01%)
EU Status member since 1981
Economy
National Currency EUR (Euro) since 1 January 2001
GDP 
    Nominal GDP (2015)176.0 bln EUR ↓ (-0.02%)
    Nominal GDP per Capita (2015)16 200 EUR ↓ (-0.01%)
    Real GDP Growth (2015)-0.2 % ↓ (2014: 0.8 %)
Inflation Rate 
    CPI, MoM (Sep 2016)0.7 % ↑ (Aug 2016: 0.0 %)
    CPI, YoY (Sep 2016)-0.1 % ↓ (Aug 2016: 0.4 %)
    CPI, Year Average (2015)-1.1 % ↑ (2014: -1.4 %)
Unemployment Rate (2015)24.9 % ↓ (2014: 26.5 %)
Government Bond Yield (Sep 2016)8.34 % ↑ (Aug 2016: 8.19 %)
Credit Ratings (as of Sep 2016)
    FitchCCC substantial credit risk
    Moody'sCaa3 in default with little prospect for recovery, outlook stable
    S&PAA- high grade
Taxation
Double Taxation Agreements 56 signed agreements
Information Exchange 
    Exchange on Request 3 signed agreements
    Automatic Exchange starts in September 2017
FATCA IGA agreed on 30 November 2014, Model 1
Banking Sector
Financial Market Development 2.5 (max 7.0) rank: 136th out of 138 countries
    Banks' Soundness 2.7 (max 7.0) rank: 134th out of 138 countries
Banking Industry Country Risk 10(1 - lowest risk, 10 - highest risk)
    Economy Risk 10
    Industry Risk 8
Deposit Guarantee Scheme 
    Maximum Protected Amount 100 000 EUR
Country Ceiling for Deposits 
    Local Currency (Euro)Caa3 in default with little prospect for recovery
    Foreign CurrencyCaa3 in default with little prospect for recovery
Deposit Rates (Aug 2016, EUR)0.87 % ↑ (Jul 2016: 0.86 %)
Banking Sector Structure 
    Number of Banks45
    Recent Changes (2015) new banks: 2, closed banks: 2
    Consolidated Assets (2015) 350.18 bln EUR ↓ (-5.00%)
Major Banks
 National Bank of Greece  Eurobank Ergasias (Eurobank EFG)
 Piraeus Bank  Emporiki Bank of Greece S.A.
 Alpha Bank  Attica Bank S.A.
 List of Banks in Greece

Greek Economy

National Currency

Greece joined the Euro Area on 1 January 2001.

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GDP

According to Eurostat, nominal GDP of Greece in 2015 was 176.0 bln EUR.

Greece underperforms the European Union in terms of real GDP growth with the average annual differential coming to -1.1% over the past 10 years (2005 - 2015). In 2015 real GDP growth was -0.2% which was below the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.

Real GDP Growth in Greece.
Chart 1. Real GDP Growth in Greece. Source: Eurostat, International Monetary Fund.

In 2015, nominal GDP per capita in Greece was 16 200 EUR.

Greece has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -25.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Greece; European Union = 100.
Chart 2. GDP Per Capita at Purchasing Power Parity in Greece; European Union = 100.
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Inflation Rate

According to Eurostat, inflation rate in Greece in 2015 expressed as annual percentages of average consumer prices was -1.1% which was below the Euro Area average (0.0%) and below the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.

Inflation Rate in Greece.
Chart 3. Inflation Rate in Greece. Source: Eurostat, International Monetary Fund.
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Taxation in Greece

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

Greece signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Albania
 Armenia
 Austria
 Azerbaijan
 Belgium
 Bulgaria
 Canada
 China
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Egypt
 Estonia
 Finland
 France
 Georgia
 Germany
 Hungary
 Iceland
 India
 Ireland
 Israel
 Italy
 Korea, Republic of
 Kuwait
 Latvia
 Lithuania
 Luxembourg
 Malta
 Mexico
 Moldova, Republic of
 Morocco
 Netherlands
 Norway
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 San Marino (Apr 2014)
 Saudi Arabia
 Serbia
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Tunisia
 Turkey
 Ukraine
 United Kingdom
 United States
 Uzbekistan

There are also several agreements between Greece and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

 United Arab Emirates
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Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Greece signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Guernsey (Mar 2014)

There are also several agreements between Greece and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Cook Islands (Feb 2013)
 Gibraltar (Jan 2013)

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Greece signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information

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FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Greece agreed in substance to use FATCA on 30 November 2014 (Intergovernmental Agreement Model 1): the text of the IGA has not been released and financial institutions operating in Greece are allowed to register on the FATCA website consistent with the treatment of having an IGA in effect provided that Greece continues to demonstrate firm resolve to sign the IGA as soon as possible.

Further Information:
FATCA and European countries

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Greek Banking Sector

Financial Market Development

According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Greece is scored 2.5 out of maximum 7.0 and ranked 136th out of 138 analysed economies. Soundness of banks is scored 2.7 bringing Greece into the 134th place, trustworthiness and confidence of financial market is scored 2.8 (135th place).

Financial Market Development in Greece.
Chart 4. Financial Market Development in Greece. Source: WEF.
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Banking Industry Country Risk

Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.

Greece is included into group '10' with economic risk scored '10' and industry risk scored '8'.

BICRA Group 10
Economic risk 10
    Economic resilience very high
     Economic imbalances very high
    Credit risk in economy extremely high
Industry risk 8
    Institutional framework high
    Competitive dynamics intermediate
    Systemwide funding extremely high
Government support assessment supportive

Table 1. BICRA for Greece. Source: S&P's.

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Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Greece are summarised in Table 2.

Scheme Participantsall credit institutions operating in Greece, branches of non-EU banks, branches of Greek banks abroad
Scheme Exemptionsbranches of EU-banks (covered by their home countries)
Eligible Depositorsnatural persons, legal entities
Covered Accountsall deposit accounts (for example, savings accounts, sight deposits, current accounts, time deposits)
Covered Currenciesall
Maximum Protected Amount100 000 EUR
Paid In CurrencyEUR

Table 2. Deposit guarantee scheme in Greece.

Further Information:
Deposit Guarantee Schemes in Europe

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Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local currency (Euro) deposit ceiling for Greece is set to Caa3 (in default with little prospect for recovery), foreign currency deposit ceiling is Caa3 (in default with little prospect for recovery).

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Deposit Rates

In Aug 2016, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.87% which was above the Euro Area average (0.53%).

Deposit Rates in Greece.
Chart 5. Deposit Rates in Greece. Source: ECB.

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Banking Sector Structure

Currently there are 45 credit institutions operating in Greece.

Recent structural changes (2013 - 2015) of the banking sector of Greece are summarised in Table 3.

201320142015
Number of Opened Banks112
Number of Closed Banks812

Table 3. Recent structural changes in the banking sector of Greece.

All the credit institutions operating in Greece can be classified into several categories. Table 4 summarises the number of banks in each category.

CategoryNumber of Banks
Banks11
Branches of foreign banks21
Central banks1
Cooperative banks12

Table 4. Number of banks by category in Greece.

The list of the most recently opened banks in Greece is provided in Table 5.

NameStart Date
 ProCredit Bank (Bulgaria) EAD (new)November 2015
 HSH Nordbank AG (new)April 2015
 FIMBank plc (new)May 2014
 Crédit Suisse (Luxembourg) S.A. (new)July 2013

Table 5. The most recently opened banks in Greece.

There are 21 branches of foreign banks from 14 different countries in Greece. Table 6 shows 10 countries having the biggest number of branches in Greece.

Country of OriginNumber of Branches
 Germany5
 United Kingdom3
 Austria2
 France1
 Spain1
 Russian Federation1
 Turkey1
 Denmark1
 Ireland1
 Luxembourg1

Table 6. Number of branches of foreign banks in Greece grouped by country of origin.

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