Greece’s Financial Regulations: A Guide to Navigating the Market
Greece’s Economic Turnaround
The Greek economy has shown a remarkable turnaround, with GDP growth of 6.3% in the first semester of 2021, following a 9% decline in 2020 due to the COVID-19 pandemic. This recovery has been driven by increased private consumption and exports, as well as the implementation of monetary and fiscal policies that have reduced the exposure of the banking sector to non-performing loans.
Green Bonds on the Rise
The shift towards a more sustainable economy has become increasingly important, with the European Union implementing a new recovery instrument to tackle the economic consequences of the COVID-19 crisis. The issuance of green bonds under this program is in line with the European Commission’s efforts to foster the green bond market and provide investors with more green diversification options.
- Greece aims to issue its first green sovereign bond in 2022, contributing significantly to the global effort towards a greener transition.
- To promote domestic climate economy, microfinance institutions have been established to provide microcredit to very small-sized entities, self-employed individuals, and socially vulnerable groups.
Hercules II: A Program to Reduce NPLs
The Hellenic Republic has introduced a program called Hercules II, which aims to reinforce Greek banks’ balance sheets and further reduce non-performing loans. The program allows for the extension of servicer remuneration and interest on mezzanine notes in emergency situations.
Microcredit and Microfinance Institutions
Greek law 4701/2020 established the framework for microcredit provision, introducing the notion of microfinance institutions licensed and supervised by the Bank of Greece. Eligible beneficiaries can receive microcredit from more than one institution, provided that the aggregate amount does not exceed €25,000.
Cryptocurrencies: A Regulatory Regime
Greek law 4557/2018 has now been applicable to digital wallet providers and cryptocurrency exchanges following its amendment in order to transpose AML5 provisions into Greek law. The establishment of a specific registry was made through HCMC decision no. 5/898/3.12.2020, in which all digital wallet providers and cryptocurrency exchanges must be registered.
Conclusion
The Greek financial regulations are constantly evolving, with new laws and programs being introduced to support the growth and stability of the economy. Understanding these developments is crucial for navigating the market effectively.