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Economy and Banking Sector of Greece

Greece
Location
Southeastern Europe
Population  (2016)
10 783 748  (-0.01%)
EU Status
member since 1981
Currency
EUR (Euro)
Nominal GDP (2016)
175.9 bln EUR  (0.00%)
Credit Ratings (as of Sep 2016)
CCC/Caa3
Consolidated Banking Assets (2015)
350.18 bln EUR  (-5.00%)
Deposit Guarantee
100 000 EUR
Number of Banks
44

Greece is a democratic and developed country with an advanced high-income economy, strategically located at the crossroads of Europe, Asia, and Africa. Greece is a member of the European Union and of the Economic Monetary Union.

Greece has a service oriented ecomony, with important industries being tourism, food and tobacco processing, textiles, chemicals, metal products. In 2009, Greek ecemony suffered a severe financial crisis resulted from a combination of domestic and international factors.

Greek banking system consists of four domestic systemic banks, several regional cooperative banks and foreign-controlled banks.

List of Banks in Greece

National Currency

Euro (EUR)

Greece joined the Euro Area on 1 January 2001.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2015)Real GDP Growth (2016)
175.9 bln EUR  (0.00%)16 200 EUR  (-0.01%)0.0 %  (2015: -0.2 %)

According to Eurostat, nominal GDP of Greece in 2016 was 175.9 bln EUR.

Greece underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.5% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 0.0% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 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 -21.7% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2022 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.

Inflation Rate

CPI, MoM (Mar 2017)CPI, YoY (Apr 2017)CPI, Year Average (2016)
1.4 %  (Feb 2017: -0.1 %)1.8 %  (Mar 2017: 1.7 %)0.0 %  (2015: -1.1 %)

According to Eurostat, inflation rate in Greece in 2016 expressed as annual percentages of average consumer prices was 0.0% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

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

Unemployment Rate

Unemployment Rate (2016)
23.6 %  (2015: 24.9 %)

Government Bond Yield

Government Bond Yield (Mar 2017)
7.17 %  (Feb 2017: 7.52 %)
According to Eurostat, government bond yield in Greece in Mar 2017 was 7.17%, compared to 7.52% in Feb 2017.
Government bond yield of Greece. Chart 4. Government bond yield of Greece. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
CCC (substantial credit risk) Caa3 (in default with little prospect for recovery), outlook stable

Double Taxation Agreements

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

DTAs of Greece: 56 Signed Agreements

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

Information Exchange

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

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

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

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

Exchange on Request: 3 Signed Agreements

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 Exchange: Starts in September 2017

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

Further Information

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).

FATCA Status in Greece
IGA agreed on 30 November 2014, Model 1

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

Financial Market Development

Financial Market Development
2.5 (max 7.0), 136th out of 138 countries
Banks' Soundness
2.7 (max 7.0), 134th out of 138 countries

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 5. Financial Market Development in Greece. Source: WEF.

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

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 1.

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 1. Deposit guarantee scheme in Greece.

Further Information

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) Foreign Currency
Caa3 (in default with little prospect for recovery) Caa3 (in default with little prospect for recovery)

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).

Deposit Rates

Average Deposit Rate (Feb 2017, EUR)
0.67 %  (Jan 2017: 0.69 %)
In Feb 2017, 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 0.67% which was above the Euro Area average (0.43%).
Deposit Rates in Greece. Chart 6. Deposit Rates in Greece. Source: ECB.

Banking Sector Structure

Number of Banks
44
Consolidated Assets (2015)
350.18 bln EUR  (-5.00%)
Recent Changes (2016)
new banks: 0, closed banks: 1

Currently there are 44 credit institutions operating in Greece.

In 2015 consolidated banking assets in Greece were 350.18 bln EUR. The consolidated banking assets' evolution is shown at Chart 7 below.

Consolidated banking assets in Greece. Chart 7. Consolidated banking assets in Greece.

Recent structural changes (2013 - 2016) of the banking sector of Greece are summarised in Table 2.

2013201420152016
Number of Opened Banks1120
Number of Closed Banks8121

Table 2. Recent structural changes in the banking sector of Greece.

The list of the most recently opened banks in Greece is provided in Table 3.

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. (closed)July 2013
 

Table 3. The most recently opened banks in 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
Banks10
Branches of foreign banks21
Central banks1
Cooperative banks12

Table 4. Number of banks by category in Greece.

There are 21 branches of foreign banks from 13 different countries in Greece. Table 5 shows 10 countries having the biggest number of branches in Greece.

Country of OriginNumber of Branches
 Germany6
 United Kingdom3
 Austria2
 Turkey1
 Denmark1
 Ireland1
 Malta1
 United States1
 Bulgaria1
 Iran, Islamic Republic of1

Table 5. Number of branches of foreign banks in Greece grouped by country of origin.