August 1, 2019 / 10:57 AM / 10 months ago

Breakingviews - Greece’s new PM needs to avoid banking own goal

Greek Prime Minister Kyriakos Mitsotakis presents his government's main policies during a parliamentary session in Athens, Greece, July 20, 2019.

ATHENS (Reuters Breakingviews) - Greece’s new Prime Minister Kyriakos Mitsotakis is off to a great start. It would be a shame for the former Chase banker to retard that progress in his efforts to revive Greek finance. At issue is the leadership of the Hellenic Financial Stability Fund, which was established to oversee the government’s stakes in four of its largest institutions, including 40% of National Bank of Greece and 26% of Piraeus Bank. Two years ago HFSF named an Austrian, Martin Czurda, as its chief executive. That choice rankled Greek bankers and politicians. But it was demanded by euro zone institutions involved in the country’s bailout, including the European Central Bank and the European Stability Mechanism. The fund needed someone to put pressure on the banks who was free of any conflicts of interest that might inhibit a former or future member of the local financial industry. The fruits of that decision were on display again at NBG’s annual meeting on Wednesday. Shareholders approved expanding the board of the 2.4 billion euro bank to include two new independent non-executive directors. One, former Finance Minister Gikas Hardouvelis, will serve in a senior capacity. The revamp was the result of a campaign by Czurda’s team as well as Velos Advisory, an external governance consultant. Though it met with resistance from NBG’s chairman and others, it received a positive reception from international investors. The bank’s stock has more than doubled this year. The new government hasn’t yet publicly sought a changing of the guard at HFSF. However, the idea of putting a Greek in charge cropped up during the recent election campaign and is popular in the banking community. Another suggestion would see the fund tucked into the Hellenic Corporation of Assets and Participations, a holding company for state-owned assets, diluting HFSF’s independence. Either move could provoke a potentially distracting fight with constituents like the ECB. It would also detract from the work the fund is doing, alongside the Bank of Greece, to reduce dud loans which still account for 45% of all bank credits. And it would remind investors of Greece’s previous Syriza government, which in 2016 pressured the CEO of Piraeus Bank to resign against the wishes of shareholders. Czurda’s mandate expires in June 2020, a little more than two years before the fund itself can be wound down. To avoid scoring an own goal, Mitsotakis should bide his time.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below