From The Financial Times

January 14, 2019

Frances Coppola

This week’s collapse of Greece’s coalition government comes at a delicate time for the country’s suffering financial sector. Over the weekend Alexis Tsipras, prime minister, called a confidence vote in his government after Panos Kammenos, defence minister, resigned in protest over a deal with Macedonia to end a dispute over its name. If the Syriza government loses, there will be early elections.

This would, temporarily at least, disrupt plans for government involvement in much-needed bank reform. Greece’s banks have survived the country’s economic depression but they have paid a heavy price: they are barely profitable, their balance sheets are stuffed with non-performing loans and — crucially — they are not lending.

Business leaders and politicians are anxious to clean up the banks’ balance sheets. They hope that the return of bank lending will kick-start the ailing Greek economy. But the slowing global economy, and the return of domestic political instability, mean that the country may have left it too late.

Link to full article in The Financial Times