International Media Review

International Media Review


“The Shortcomings of Quantitative Easing in Europe”

contribution by Martin Feldstein, Project Syndicate, Jan 29, 2016

“Why has the US Federal Reserve’s policy of quantitative easing been so much more successful than the version of QE implemented by the European Central Bank? That intellectual question leads directly to a practical one: Will the ECB ever be able to translate quantitative easing into stronger economic growth and higher inflation?
… The Fed introduced quantitative easing – buying large quantities of long-term bonds and promising to keep short-term interest rates low for a prolonged period – after it concluded that the US economy was not responding adequately to traditional monetary policy and to the fiscal stimulus package enacted in 2009. The ECB has been following a similar strategy of large-scale asset purchases and extremely low (indeed negative) short-term interest rates. But, although the policy is the same as the Fed’s, its purpose is very different.
Because Europe lacks the widespread share ownership that exists in the United States, quantitative easing cannot be used to stimulate consumer spending by raising household wealth. Instead, a major if unspoken purpose of the ECB’s low-interest-rate policy has been to stimulate net exports by depressing the value of the euro. The ECB succeeded in this, with the euro’s value falling by some 25% – from $1.40 in the summer of 2014 to $1.06 by the fall of 2015… (full report)

“Greece Could Still Bring Down Europe”

by Ian Bremmer TIME magazine, 28/1/2016 (it will appear on the Feb 8 issue)

A few months and a million migrants ago, Greece’s financial problems were the biggest story in Europe. Yet despite last year’s bailout, Greece and its struggles could again push European unity to the brink, because the country’s reform process is headed for a confrontation.
… But Tsipras’ biggest problem may be that German Chancellor Angela Merkel can no longer afford to compromise with his government. Merkel has gambled that Germans will allow her to accept future waves of refugees into her country with no limit on their number. But as ordinary Germans fear the effect of the migrant surge on the country’s security and identity, Merkel has seen her approval ratings fall to their lowest levels in more than four years. She might soon become too politically weak to throw Greece yet another much needed lifeline. Trapped between an increasingly angry Greek public and creditors in no mood for concession, Tsipras might again find himself in the firing line.
That’s why, though the refugee crisis and Britain’s looming referendum on E.U. membership now dominate Europe’s news, Greece might yet be the story that pushes European consensus to the breaking point.
(full report)

“EU Report Says Greece Has Neglected Obligations to Guard Border”

by Viktoria Dendrinou, Jan. 27, 2016 .

“Greece has neglected its obligations in guarding its external borders, top European Union officials concluded Wednesday, potentially opening the way to extend for up to two years temporary border checks in Europe introduced in response to the migration crisis.
… If the report’s conclusions muster support from a qualified majority of the 26 governments of Europe’s passport-free zone, known as Schengen, Greece will then have three months to comply with recommendations by the commission on how to improve the monitoring of its external borders. (full report)

“US hedge fund cries foul over Greek bank”

FT Jan 14, 2016

“Paulson & Co, the US hedge fund run by billionaire John Paulson, has written to head of the Greek bank rescue fund to complain about reports that it asked the CEO of Piraeus to resign.
The letter was sent after media reports on Wednesday that the powerful Hellenic Financial Stability Fund had demanded the resignation of Anthimos Thomopoulos only a few weeks after injecting €3.3bn into Piraeus. Two senior Greek bankers with knowledge of the situation confirmed that Mr Thomopoulos had been asked to step down. Suspicions that the leftwing Syriza government is behind the reported push to oust Mr. Thomopoulos have caused concern about political interference in the banking sector…

“Greece 'accepts' IMF role in bailout: Eurogroup chief”

AFT 14.01.2016.

Eurogroup chief Jeroen Dijsselbloem on Thursday said Greece had "fully accepted" that the International Monetary Fund take a role in its third bailout programme despite Athens earlier saying the fund is no longer needed. "(Finance Minister Euclid) Tsakalotos confirmed to me that the Greek government accepts that the IMF needs to be part of the process," said Dijsselbloem, who is also Dutch finance minister, as he arrived for talks with his eurozone counterparts... (more)

“Greece exits deflation after 33 months, uptick seen sustainable”

Reuters, Jan 13, 2016

Greece emerged from 33 months of deflation in December, finally seeing some price rises after a bruising period of economic decline and political upheaval. Inflation calculated to European Union norms rose 0.4 percent in December, topping forecasts, data from the country's statistics service showed on Wednesday. But the headline consumer price index using Greece's local methodology fell 0.2 percent year-on-year in December, although the annual pace of deflation decelerating from the previous month… (more)

“Next Up for Greece: How to Shrink the Debt”

WSJ, 14.01.2016.

“Greece’s creditors are expected to start talking soon over an issue that has been looming over the eurozone since 2010: cutting the country’s mountainous debt burden. Greece already sliced its debts to private lenders through a bond swap in 2012. But that wasn’t enough. Now, most of its debt is owed to other eurozone governments, which have conceded Athens needs more relief. …But while the creditors—the eurozone and the International Monetary Fund—broadly agree on how they could go about cutting Athens’ debt, they will likely lock horns over how much relief the country will need. The IMF wants Greece to get a substantial reprieve and foresees a gloomier outlook for its economy. Most eurozone governments balk at large-scale debt relief, and the bloc’s institutions have been more optimistic about Athens’ economic prospects…”



Bancpost chief: There is still enough room lending to grow, especially in Corporate banking”,

Ziarul Financiar daly, Jan 21, 2016

“Bancpost’s CEO, George Georgakopoulos, says that 2015 has been the first year that the trust of the business environment and consumers has shown signs of consolidation. More than half of the companies audited by the NBR said that they would take out a RON loan, regardless of the financing cost. The head of Bancpost, which is a subsidiary of Eurobank, said that his bank will support the commercial activities of companies in IT, Telecom, Manufacturing and Export. Bancpost has been forced to accelerate the restructuring process in 2014. In 2015, for a few months, banks with Greek capital in Romania (Alpha Bank, Bancpost, Piraeus Bank and Banca Romaneasca), have been the center of attention because of the Greek financial crisis.”

Eurolife ERB prolonged the mandates of the managerial team by four years ”

Ziarul Financiar daly, Jan 25, 2016

“Eurolife ERB prolonged the mandates of the managerial team by four years, reads a release published by the Official Monitor. This means the position of general manager would continue to be occupied by Anita-Laura Nitulescu. Nitulescu joined the company in 2006, when the insurance division was controlled by Eurobank. Eurolife Asigurari de Viata then ranked eighth on the local market, with a market share of 4.5%. Eurobank, the third largest bank in Greece, which also controls Bancpost on the local market, owned the majority stake in Eurolife Asigurari until December 2015. The Eurobank stake in Eurolife ERB was lowered from 80% to 20% through an international transaction.

Bancpost might try to restore its liquidity in 2016, increase turnover and limit NPLs”

Bursa financial daily, Jan 15, 2016

“Bancpost, the local subsidiary of Eurobank, might try to restore its liquidities in 2016, increase the turnover and remove NPLs from its portfolio. The Eurobank strategy for Bancpost, has yet to be disclosed. Bancpost currently ranks tenth largest player on the banking market, evolution that determined a harsh restructuring process. Part of its branches have closed and the bank has so far lower operational cost by 17%, while the cost to revenue ratio has improved. George Georgakopoulos, the head of Bancpost, said in 2015 that the restructuring process is completed and the institution would now focus on lending and attracting deposits. The loans to deposits ratio for the January-September period stood at 87%, which offers Bancpost a high degree of financial independence. For 2015, Bancpost posted a profit of RON 65.8 million. The parent bank Eurobank had the lowest capital needs vs the four systemic Greek banks, according to the ECB stress tests; the capital requirements of Eurobank were set between EUR 339 million and 2.1 billion. The list of potential objectives for Bancpost in 2016 includes the sale of NPLs, the attempt to increase turnover or maintaining the bank in the black.



“Postbank and EOS Matrix Bulgaria have signed an agreement for a portfolio with consumer loans and credit cards for EUR 143.6m”

Capital daily 29/1/2016

Postbank and EOS Matrix Bulgaria have signed an agreement for a portfolio with consumer loans and credit cards for EUR 143.6 million. The deal was concluded after negotiations between Eurobank Group, of which Postbank is a part, and several international companies which specialize in debt collection; out of those, EOS Matrix was selected. The bank has stated that borrowers will receive the same professionalism and quality as before. This was one of the most important conditions that the bank had for the buyer of the portfolio of consumer loans credit cards. From the clients’ point of view there is no real change, just a legal change of their loaner’s creditor in their contract. As before, they receive the same service with the same conditions.

Dimitar Shumarov, talks about the bank's “Investor in Society” award”

published at, 25/1/2016.

“…Dimitar Shumarov, executive director and chief finance officer at Postbank, talks about the advantages of participating in the competition. We decided to take part [in the competition] not so much for the award, as for the excellent opportunity to share what we have achieved during the year – our ideas and projects, he says.
Postbank is one of the big CSR 2014 winners in the competition…
OK! Magazine, p. 108, 109, 23.01.2016.

“Business recognition”

OK magazine, 23/1/2016

Forbes Bulgaria named people who have transformed the economy of our country during the official ceremony of the contest Forbes Business Awards 2015. A total of 60 Bulgarian companies competed for prizes. Besides the awards in eight categories, Forbes Bulgaria presented four special awards. The one for "Innovation in the development of banking products" was given to Postbank.”

“The banking sector is expected to consolidate”

Ikonomika weekly magazine, Jan 13, 2016.

“2016 will be definitely influenced by the steps the Bulgarian National Bank has taken in relation to the asset quality review and the following stress tests at all banks in Bulgaria. The results of the review and the stress tests are likely to lead to initial measures for the re-structuring of the segment, especially the segment of the large number of small bank institutions in terms of capital and market share. We might also witness the merging of larger banks, especially Greek-owned ones (but not only) as a result of the re-structuring processes in their parent-banks. United Bulgarian Bank (UBB) will continue developing very dynamically, implementing the adopted strategy of boosting soon its somewhat slow market growth (for obvious reasons) of the last several years.


“Greek banks in Serbia merging?”

Vecernje Novosti daily, Jan 23, 2016

The banking system in Serbia, with 30 banks, is too large, bearing in mind the population and the size of the economy, so according to economists, its further reduction is expected. After the departure of Paribas Group and the sale of Findomestic to Hungary’s OTP Bank, the departure of KBC Bank, it is expected that within the next couple of years some other banks will leave the country or merge.First of all, integration of two Greek banks is expected by the end of 2017. It has been speculated that one bank from this country will withdraw in the next two years as well; in case the exonomic environment does not change. Summing up, five state-owned banks have a market share of 20 percent in Serbia, followed by four Greek banks with 18.7% and two Italian banks with slightly more than 17 percent. Even the 14 most successful banks are too many for such a small market... Bankers note that an unwritten rule is to have one bank per one million citizens. It would mean that seven to nine banks would be an optimal solution. Credit activity is stagnating, not only in Serbia, but across Europe and the region as well, and that is the core competence of banks – says Mlađan Kovačević, an economist.