Banks represent the main source of financing in Greece.  Time and sight deposits constitute the largest item on the liability side of Greek commercial bank balance sheets. Before the 2009 Eurozone debt crisis, checks – especially post-dated - were used predominately for commercial transactions and large ticket item purchases and 30 to 90 days payments were common. Since the debt/financial crisis began in 2009, more and more companies/suppliers (including foreign companies) have sought to avoid accepting post-dated checks.  Additionally, banks do not easily issue checks to new customers and have implemented strict rules regarding check renewals of existing customers. 

Credit card penetration is extensive, and Covid-19 led more Greeks to familiarize themselves with their use and specifically with contactless use. The total number of active payment cards (both credit and debit cards) in the market in 2020 was 14.1 million in debit cards and 2.5 million in credit cards.

The bond market in Greece is fully deregulated; however, it is still dominated by the issuance and trading of government bonds. Interest on corporate bonds is exempt from tax if earned by a non-resident.

The Athens Stock Exchange (ASE) has been widely used as a source of capital financing. Demand and volume have been decreasing on the ASE, however, and 2011 was the second worst year (after 2008) in the past 20 years of ASE’s history, both because of continued decreases in share prices (due to the Greek sovereign debt crisis), and due to a large shift in capital flows from developed to emerging stock markets. The Athens Stock Exchange has shown volatility the last five years and has decreased 12.18% since January 2022.

S&P Dow Jones reclassified Greece from a developed to an emerging market in September 2014, becoming the latest market index to make the change. The Russell index previously reclassified Greece as an emerging market as of July 2013, while the MSCI index made the change effective November 2013. The reclassifications triggered a transfer of holdings of Greek equities from institutional investors in developed markets to those willing to invest in higher markets and drew several billion euros of new capital into the Greek market.

The Greek banking system has been substantially liberated from political patronage prevalent in the past, and now extends credit based on international best practices and credit risk scoring models. A large and profitable firm can secure financing at rates lower than those offered to a self-employed professional because of the problems assessing an individual’s creditworthiness.  Most banks, as the financial crisis deepened, tightened their credit risk scoring rules, making credit more difficult and more expensive to access for households and companies. A credit bureau has been set up by the Federation of Greek Banks, but it is still of limited use (Greek personal data protection laws limit its scope). Matters are made worse by widespread tax evasion (estimated to be 20% or more of GDP), with some individuals hiding income from the tax authorities, which leads to higher interest rates for members of the public when they attempt to secure a loan. The national tax authority has made significant improvements, however, in tax administration and enforcement over the past 18 months.

Banking Systems: As of April 2017, the Greek banking system consists of a central bank (Bank of Greece, which is a Eurosystem-member central bank) and another 39 credit institutions. Eighteen credit institutions are based in Greece (eight commercial banks, 9 local cooperative banks, and one Loan & Consignment Fund), and 17 are branches of commercial banks based in other EU member states. Another four are branches of banks based outside the EU, one of which is Bank of America. Greek-owned banks command the lion’s share of the market with about 80% of total asset value. Foreign-owned banks hold 12%, and the remaining 8% is shared between specialized institutions and local cooperative banks. The top four banks control 90% of both the loan market and deposits. Greek banks suffered large losses in the March and December 2012 Greek debt restructuring operations (Private Sector Involvement – PSI) but have been recapitalized. Other notable developments in early 2013 include the acquisition of the Greek branches of three Cypriot banks (Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank) by Piraeus Bank. Piraeus has also signed an agreement to acquire Portuguese-owned Millennium Bank and in 2012 acquired the healthy assets of the public Agricultural Bank of Greece. Alpha Bank acquired Emporiki Bank, Eurobank acquired Hellenic Postbank and Proton Bank and NBG acquired FBB and Probank.

Following the implementation of a broad-based recapitalization program in 2012 and 2013 and a rapid sectoral consolidation, the banking sector largely stabilized in 2014. However, the economic uncertainty associated with the new government’s policies and the stalemate in negotiations with the country’s official sector creditors has led to a substantial drop in deposits and to heightened demand for Emergency Liquidity Assistance from the European Central Bank, on which Greece’s principal banks were heavily dependent as of May 2015. In November 2015, as part of initial implementation of the August 2015 ESM bailout agreement, Greece recapitalized its four major banks for a third time in five years. Large U.S. and foreign hedge funds participated in recapitalization of the principal Greek banks. The banking system remains unable to finance the national economy as over 40% of all bank-held loans are non-performing. Efforts to create an NPL market to service these loans – a requirement under the ESM agreement – have been halting. As a result, businesses of all sizes struggle to obtain bank loans to support their operations. Due to this constraint, international financial institutions, such as the European Bank for Reconstruction and Development, are now working to issue loans and bring additional liquidity to the Greek market.

As of January 1, 2001, Greece entered the European Monetary Union (Eurosystem) and implemented its single currency monetary policy in Greece through the central bank, the Bank of Greece. The Eurosystem is comprised of the European Central Bank and the national central banks of European Union states that have adopted the euro. The Bank of Greece is also the depository for government accounts. The Bank of Greece acts as regulatory agent for the European Central Bank’s Single Supervisory Mechanism (SSM), which entered into force November 1, 2014. The SSM and the Bank of Greece, together regulate and supervise the commercial banking industry in Greece, as well as Greek banks operating outside of Greece, and approves the establishment of foreign banks in the country.

Foreign Exchange Controls: Greece’s foreign exchange market conforms to EU rules on the free movement of capital. Controls only existed to facilitate the enforcement of money laundering and terrorist financing laws. As of January 1, 2001, Greece became part of the Eurozone and all transactions have been conducted in Euros since March 1, 2002. Until June 2015, receipts from productive investments could be repatriated freely at market exchange rates and there were no restrictions on, or difficulties with, converting, repatriating, or transferring funds associated with an investment. In late June 2015, the government declared a bank holiday, during which banks were closed for two weeks, and imposed capital controls which remain in force as of May 2017. Capital controls placed a limit on weekly cash withdrawal amounts and restricted the transfer of capital abroad. Although capital controls have been lifted since the August ESM 2015 agreement which calmed fear of a national bankruptcy and financial system collapse, several restrictions still apply. A five-member “Banking Transaction Approval Committee” was established by the Finance Ministry and is the competent authority to approve transactions abroad, in coordination with the Bank of Greece. Currently, the daily limit for commercial payments abroad stands at €250,000. Additionally, capital controls imposed on stock exchange transactions were lifted in December 2015.

U.S. Banks and Local Correspondent Banks: Bank of America operates in Greece, providing services only to companies. In September 2014, Alpha Bank announced the completion of the acquisition of Citibank’s retail operations including Citi’s wealth management unit.

Banks represent the main source of financing in Greece. Time and sight deposits constitute the largest item on the liability side of Greek commercial bank balance sheets.

Before the 2009 Eurozone debt crisis, checks – especially post-dated - were used predominately for commercial transactions and large ticket item purchases and 30 to 90 days payments were common. Since the current debt/financial crisis began in 2009, more and more companies/suppliers (including foreign companies) have sought to avoid accepting post-dated checks. Additionally, banks do not easily issue checks to new customers and have implemented strict rules regarding check renewals of existing customers. 

The Greek banking system has been substantially liberated from political patronage prevalent in the past, and now extends credit based on international best practices and credit risk scoring models. A large and profitable firm can secure financing at rates lower than those offered to a self-employed professional because of the problems assessing an individual’s creditworthiness.  Most banks, as the financial crisis deepened, tightened their credit risk scoring rules, making credit more difficult and more expensive to access for households and companies. A credit bureau has been set up by the Federation of Greek Banks, but it is still of limited use (Greek personal data protection laws limit its scope). Matters are made worse by widespread tax evasion (estimated to be 20% or more of GDP), with some individuals hiding income from the tax authorities, which leads to higher interest rates for members of the public when they attempt to secure a loan. The national tax authority has made significant improvements, however, in tax administration and enforcement over the past 18 months.

For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.