ATHENS, Oct. 15 (Xinhua) -- The Greek government will offer a state guarantee worth 15 billion euros (some 20.6 billion U.S. dollars) to all financial institutions in the country aiming at cutting the cost of financing, Greek Economy and Finance Minister George Alogoskoufis said here on Wednesday.
He said that the inner cabinet meeting approved a package of measures aimed at offering protection to Greek banks and strengthening the Greek economy amid an international credit crisis.
Alogoskoufis said the package also includes the issuance of special bonds to financial institutions, up to 8 billion euros, with banks offering adequate insurance for these bonds. The government will also offer up to 5 billion euros to strengthen Greek banks' capital base, with the Greek state purchasing banks' preference stocks.
The Greek minister said any bank interested to be included in the measures will have to apply for approval with the Bank of Greece. He said that an international credit crisis has taken unprecedented dimensions, creating problems to banks, undermining confidence and liquidity problems in markets.
The banking system in Greece, he add, has solid basis, but because of the crisis there was always the problem with rising interest rates and lack of liquidity.
Alogoskoufis said the package of measures was taken to ensure fair competition, since other countries have taken similar measures to protect banks.
The Greek minister reiterated the government's political commitment to protecting all bank saving deposits and noted that the package of measures would not put a burden on the country's fiscal condition.
Bank of Greece's governor, George Provopoulos, said that Greek banks will take advantage of the government measures to avoid facing any competitiveness problems and said that the package of measures will be tabled to Parliament in the next 10 days. (1 U.S. dollar = 0.7283 euro)
