Athens, 18 April 2016
Good afternoon, Ladies and Gentlemen, thank you very much for participating at this event. I am also very glad to see the deputy Prime Minister here, especially Members of the European Parliament and especially Greek entrepreneurs and representatives of the private sector. I was told that you have already been briefed by our colleagues from the EIB how EFSI functions at the moment. So, I will not repeat what has already been said but I have a few ideas about what can be done here in Greece. But it depends on you; everything depends on private investors, entrepreneurs, those who are representing business environment and business society here in Greece. But of course, public sector can also play a role as a facilitator how to use all the opportunities what EU is providing at the moment.
As you already know there seems to be demand for EFSI kind of financing all over Europe. EFSI is providing something which is lacking in large extend in the market at the moment. Everybody says basically that don’t pump public liquidity into the market because the market is full of liquidity. But what is missing is risk financing. This problem or the lack of risk financing comes from various issues. For instance, the banking regulation has changed.
EFSI seems to fulfil the gap quite nicely. This is true especially when we are looking at SME financing. We already have 165 agreements between EFSI and commercial banks or national promotional banks on SME financing. And as a result of these agreements, 136.000 European SMEs will get financing via EFSI. For instance, only in Italy, there are 22 banks which have done an agreement with EFSI/EIB. This will mean that 44.000 Italian SMEs will get financing from these credits.
So, my first message today is that we should look how it would be possible to use EFSI for small and medium size companies financing also here in Greece; because it would be the fastest way to boost investment and the fastest way to create jobs. Of course everything depends on demand. EFSI cannot compensate the measures what the government has to do in order to improve confidence and competitiveness. But I am sure that there are opportunities, also here in Greece, to invest in the future if financing issues can be solved and there, EFSI can play a role. I am interested to discuss with the representatives of Greek banks on the opportunity to use EFSI for SME financing. We need some local intermediaries here in Greece in order to provide financing and to make an agreement with EFSI on SME financing. You also could pass the message to the banks or if there are representatives of the banks in the audience, if they consider if it is possible to use EFSI for your clients.
The second message is that it is possible to create an investment platform in order to pool together bigger or small size investments. And there we need public sector’s help. There should be somebody, for instance the deputy prime minister here; who is kind of coordinator, coordinating the investment needs, financing needs, putting together a platform which is providing both, financing but also technical assistance. We have an excellent example of a platform in France. Ile-de-France, which is the region around Paris, they established an investment platform which was capitalised by French public bank and by private banks. Also, the region provided equity to the platform. So, basically, private bank, public bank and the region provided equity to the platform and EIB/EFSI provided very cheap long-term loans. And they are pooling together 40.000 households or 40.000 houses in order to renovate them, to become more energy-efficient.
So, what I have been thinking is that this same structure or somehow modified structure would also function in Greece. We have been talking about creating a similar platform together with Cypriot authorities for tourist infrastructure projects in Cyprus. I don’t know what kind of demands there are in the Greek tourism sector but if there is a demand for investment than this structure would also function here. In order to use EFSI for relatively small size investments, you should have some sort of platform which is collecting together, pooling together all those initiatives or all those opportunities. So, this is my second message.
My third message is that the use of the Institute for Growth in Greece could be a very good tool. It complements the role of public financiers. In many countries, national promotional banks play a crucial role, especially in SME financing and providing some sort of public financing to private projects. As you have such an institution, it would be an excellent tool to complement to what the public sector is doing. I know that the EIB has an agreement with the institution on cooperation. Also, we still have a challenge not only here in Greece but in all Member States: To raise awareness how EFSI functions. In some way we have not been successful enough to explain that EFSI is not only for big public infrastructure investments but also for smaller and medium sized companies. It’s for equity financing, it’s for private projects. The private sector can directly contact the EIB. Not in Luxembourg but in this case here in Athens. So, EFSI is part of the bank called EIB and banks have individual clients. There is no need for any sort of public or governmental approval if you want to have a customer relationship with a bank.
This is one of the reasons of my visit today. I try to pass this message through the media that as many Greek companies as possible would know that there is this kind of facility if there is a need for this type of financing.
So, Ladies and Gentlemen, as I said at the beginning, EFSI is up and running, it is functioning very well. There are opportunities, also here in Greece to use EFSI financing more than you have done so far to address market gaps. It can help get financing in very difficult circumstances, but EFSI alone will not change everything. Authorities must keep going in the reform path. We saw quite encouraging signs of confidence a couple of years ago. It is possible to get confidence back and growth follows the confidence. So, everybody understands that all these measures and reforms are very, very difficult. They are unpopular and many times there are also very painful. Many people suffer already, now. But unfortunately, we are in a situation where we have to acknowledge that if something is broken, you must fix it. So the commitment of the government to reform the country along the memorandum of understanding remains very, very important.
So I will stop here and I am ready to answer your questions. I would also like to here to your views, if we could do something or if there are opportunities that we did not found yet. EIB Athens office and the Commission’s office here in Athens, we are ready to help if help is needed and we are ready to consult people who would like to establish an investment platform. We can explain what is possible and work together with you.
Thank you very much.
Compliments of the European Commission