Greece’s Prime Minister announces zero fees on money transfers, easing financial burdens for citizens ahead of the budget vote.
Greece is set to implement a cap on the fees levied by banks for money transfers, a move announced by Prime Minister Kyriakos Mitsotakis on Sunday. In a bid to alleviate the financial burden on citizens, the government has decreed that individuals will not incur any fees when settling their bills. Mitsotakis articulated that the banks’ current initiatives to reduce administrative costs for their clientele “are not sufficient,” as he addressed lawmakers in anticipation of the forthcoming budget vote.
The newly established cap will limit bank fees for money transfers up to 5,000 euros to a modest 0.50 euros (approximately $0.52). Furthermore, customers will be exempt from additional charges when fulfilling their financial obligations to the state or paying their utility bills. This initiative emerges amidst escalating pressure on the government to consider imposing a new tax on Greek banks, which have been grappling with the repercussions of a protracted debt crisis that necessitated approximately 45 billion euros in state support to maintain their solvency.
In light of Spain’s recent increase in a windfall tax on its largest financial institutions, speculation has arisen regarding a potential similar approach in Greece. However, Mitsotakis has firmly dismissed the notion of a windfall tax during an investor event in London earlier this month, asserting that such a measure would not yield tangible benefits for the populace.
Greek banking institutions, including Eurobank Ergasias Services and Holdings SA and the National Bank of Greece SA, have recently returned to profitability, marking the first time since 2008 that they have begun distributing dividends. These banks have made significant strides in reducing non-performing loans, bringing their figures closer to the European average, and have unveiled plans to expedite the repayment of deferred tax credits.
According to data from the Bank of Greece, Greek banks reported a net fee income of €993 million in the first half of 2024, reflecting an impressive year-on-year increase of nearly 16%. Their total operating profit surged by almost 11%, reaching €5.78 billion in the six months leading up to June. In a further demonstration of corporate social responsibility, the Prime Minister announced a €100 million contribution from banks aimed at the renovation of aging schools and the construction of new educational facilities.
Additionally, the government has decided to double the property tax imposed on lenders for the properties they manage, as part of its broader strategy to devise solutions that assist families in securing housing at more affordable prices.
