FOR IMMEDIATE RELEASE
August 13, 2015
Contact: Grace Harman
Maloney and Greek-American Financial and Business Leaders call for U.S. actions to boost Greece’s ailing economy Leaders call for release of hundreds of millions in U.S. remittances to Greece; new push to attract foreign investment
NEW YORK—Today, Congresswoman Carolyn B. Maloney (NY-12), co-chair of the Congressional Hellenic Caucus and Ranking Member of the House Financial Services Capital Markets and GSEs Subcommittee, was joined by prominent members of the Greek and financial communities to urge the U.S. to take two key steps to boost Greece’s economy.
Maloney sent a letter today to U.S. Treasury Secretary Jack Lew, Federal Reserve Chair Janet Yellen, and the heads of two key U.S. federal financial regulators urging them to work with their counterparts in Greece to find a way to allow for U.S. remittances to reach family and friends in Greece. The Congresswoman also released a letter co-authored with Hellenic Caucus Co-Chair Rep. Gus Bilirakis (FL-12), encouraging the Overseas Private Investment Corporation (OPIC) to explore ways in which it can actively encourage investment in Greece to stimulate economic growth and stability.
Maloney’s efforts follow a meeting she attended on August 6th in Washington D.C. with Greek-American Leaders, White House Chief of Staff Denis McDonough, Deputy National Security Advisor for International Economics Caroline Atkinson, and Vice President Joe Biden to discuss efforts to assist Greece during its financial crisis. During the meeting an interministerial committee was established to discuss humanitarian, economic, trade, military, investment, and health issues with the Greek government. Meeting participants encouraged the formulation of a reform plan that would make the debt sustainable and create a path to economic recovery.
The Congresswoman’s sentiments were echoed by those in attendance, including Representatives from Atlantic Bank, New York Businessman John Catsimatidis, LIC Chamber of Commerce President Arthur Rosenfield, Executive Director of the Hellenic Initiative Mark Arey, and Taso Pardalis with the Hellenic American Leadership Council.
“Greece gets over $800 million a year in remittances, but right now that money is just sitting on the sidelines because of the capital controls on the Greek banks,” Congresswoman Maloney said. “We need to find a way to get the money into the Greek economy right away, so people can start paying bills, buying groceries and creating jobs. That’s why I’m calling on Secretary Lew, Chair Yellen and other U.S. financial regulatory leaders to work with their Greek counterparts to solve this pressing problem. The U.S. should also take steps to encourage more U.S. business investment in Greece and I’m proud to be working with my Hellenic Caucus Co-Chair, Rep. Gus Bilirakis, on a letter to the Overseas Private Investment Corporation urging it to do whatever it can to support Greece during this financial crisis.”
“Hard working Greek-Americans who have achieved the American dream want nothing more than to help out their families who are struggling during this hard time,” said Assemblymember Simotas. “We should do all that we can to ensure that these remittances reach their intended recipients in a timely manner.”
“As the world gets smaller and the interdependency of our economies grows, it becomes more important to help our allies maintain a robust economic climate. It is important for all our sakes to do what we can to help Greece recover from its current crisis as soon as possible,” said State Senator Michael Gianaris.
At the event Maloney released two letters aimed at U.S. agencies that could assist Greece. The first is a letter Maloney sent today to Treasury Secretary Jack Lew, FDIC Chairman Martin Gruenberg, Comptroller Thomas Curry, and Federal Reserve Chair Janet Yellen, urging Treasury and the U.S. banking regulators to work with their Greek counterparts to restore the flow of remittances from the U.S. to Greece. Currently, U.S. remittances to Greece are severely restricted due to capital constraints on Greek Banks. While U.S. banks are able to process these remittances, Greek citizens are often unable to access the full amounts because the banks in Greece are subject to a weekly withdrawal limit. In 2014, Greece received over $800 million in remittances. In a recent phone-call with the Treasury Assistant Secretary for International Finance Ramin Toloui the Congresswoman reiterated the need for remittance reform. Toloui expressed appreciation for the Congresswoman bringing the idea to him, and indicated that he would look into it and have an answer for her in three weeks.
The second is a letter to the President and CEO of OPIC, Elizabeth Littlefield requesting the agency’s engagement in Greece to encourage and attract foreign investment. The letter is co-authored by Hellenic Caucus Co-Chair Rep. Gus Bilirakis (FL-12). Allowing Greece to access private capital facilitated by OPIC would benefit the economy as foreign investment will help expedite Greece’s financial recovery.
Background
Remittances, which are generally transfers of money from one country to another, have long been utilized by migrant communities to send money to family and friends in their home country. Although currently the funds are able to reach Greece from the U.S., an issue arises when Greek citizens try to access the funds due to the weekly withdrawal limit imposed on Greek banks. This limit has been imposed during the current Greek financial crisis to prevent the country’s banks from collapsing in a disorderly and chaotic fashion.
The Overseas Private Investment Corporation (OPIC) is the U.S. Government’s development finance institution, created by Congress in 1969 through an amendment to the Foreign Assistance Act. The purpose of OPIC is to mobilize private capital to help solve critical development challenges. In order to do so, OPIC supports private investment in over 160 different countries across the globe. OPIC operates on a self-sustaining basis and there is no cost to the American taxpayer. OPIC offers three main financial services: medium to long-term funding through direct loans and loan guarantees, political risk insurance, and support for the creation of privately-owned and managed investment funds. These services would help attract foreign investment in Greece and strengthen the economic ties between Greece and the U.S.
Text of the letters are below.
August 13, 2014
The Honorable Jacob Lew The Honorable Martin J. Gruenberg
Secretary Chairman
U.S. Department of the Treasury Federal Deposit Insurance Corporation
1500 Pennsylvania Avenue NW 550 17th Street NW
Washington, DC 20220 Washington, DC 20429
The Honorable Janet L. Yellen The Honorable Thomas J. Curry
Chair Comptroller of the Currency
Board of Governors of the Federal Reserve System Office of the Comptroller of the Currency
20th Street and Constitution Avenue NW 250 E Street SE
Washington, DC 20551 Washington, DC 20219
Dear Secretary Lew, Chairman Gruenberg, Chair Yellen, and Comptroller Curry:
I am writing with regard to the dire economic situation in Greece, and the ongoing disruption to remittances from the United States to Greece.
As you know, the economic crisis in Greece has severely impaired the Greek banking system. Greek banks faced heavy deposit outflows for many months, which forced the Greek government in June to impose capital controls that limit the amount that depositors in Greece can withdraw from their bank accounts to €420 per week. While the imposition of capital controls has successfully prevented a collapse of the Greek banking system, the €420 per week withdrawal limitation has also caused day-to-day hardships for many Greeks and Greek businesses.[1]
Remittances are particularly important in times of economic and financial stress, because they can serve as a stabilizing source of income for cash-strapped families. The United States is the largest source of remittances to other countries in the world — according to World Bank data, remittances sent from the U.S. totaled $53.6 billion in 2013, which accounted for around 13.5% of total worldwide remittances.[2] Remittances to Greece, in turn, totaled more than $800 million in 2013.[3]
It has come to my attention that the capital controls in Greece, and the attendant €420 per week limit on withdrawals, have disrupted the normal flow of remittances from the U.S. to Greece — at precisely the time when these remittances to Greece can do the most good. While U.S. banks can process remittances, citizens in Greece are often unable to access the full amount remitted because the receiving banks in Greece are subject to the €420 per week withdrawal limitation. Moreover, U.S. banks are reluctant to utilize alternative intermediaries in Greece — which are not subject to capital controls — because they fear that these transactions may run afoul of U.S. anti-money laundering laws.
As remittances, by definition, involve transactions in more than one country, any solution to this problem will require coordination between U.S. and Greek financial regulators. Therefore, I strongly urge all of your agencies to work with your counterparts in Greece to identify solutions that will restore the flow of remittances from the U.S. to Greece.
Sincerely,
_______________________________
Carolyn B. Maloney
Co-Chair
Hellenic Caucus
[1] See e.g., Kerin Hope, “Greek businesses left gasping as capital controls bite,” Financial Times (August 4, 2015).
[2] See World Bank, Annual Remittance Data: Outflows, available at https://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (last accessed August 11, 2015).
[3] See World Bank, Annual Remittance Data: Inflows, available at https://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (last accessed August 11, 2015).
August 13, 2015
Elizabeth L. Littlefield
President and Chief Executive Officer
Overseas Private Investment Corporation
Dear Ms. Littlefield:
As co-chairs of the Congressional Caucus on Hellenic Affairs, we write to you regarding the deep financial crisis Greece is currently facing. As part of a larger effort for U.S. support, we ask that you explore ways to help encourage and attract foreign investment to Greece. Given OPIC’s mission to expand economic development and the great need in Greece for increased access to capital, we believe Greece is a worthy candidate for OPIC engagement. Following the third bailout deal between Greece and its creditors and the weak economic situation Greece finds itself in, access to private capital through an OPIC Mission would greatly benefit the Greek economy. Foreign investment will go a long way in helping expedite Greece’s financial recovery.
As you know, since the crisis began, the Greek economy has shrunk by over a quarter, and unemployment stands at 25%. As it continues negotiations with its European creditors, the Greek government is set to consider an array of reforms to raise revenue and stimulate economic growth. Regardless of what bailout conditions are set by European leaders, we believe that establishing an OPIC presence in Greece will enhance its future economic stability, and presents an opportunity for the U.S. and Greece to strengthen their economic ties. While Greece may not have the typical profile of other countries in which OPIC operates, we hope that you will take into account the special circumstances being faced in Greece, the human suffering created as a result of these conditions, and the positive impact increased private investment could have on the long-term stability of a strong U.S. ally. We understand that OPIC’s past operations in nations experiencing temporary financial fallout, such as Portugal, have proven successful.
Ensuring a strong Greek recovery is of great importance inasmuch as Greece is a key NATO ally and geostrategically located in the Eastern Mediterranean. OPIC engagement in Greece would greatly contribute to the country’s economic stability and thereby U.S. interests. Thank you for considering this request, consistent with all applicable rules and regulations.
Sincerely,
CAROLYN B. MALONEY GUS M. BILIRAKIS
Member of Congress Member of Congress
[1] See e.g., Kerin Hope, “Greek businesses left gasping as capital controls bite,” Financial Times (August 4, 2015)
[2] See World Bank, Annual Remittance Data: Outflows, available at https://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (last accessed August 11, 2015)
[3] See World Bank, Annual Remittance Data: Inflows, available at https://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/0,,contentMDK:22759429~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (last accessed August 11, 2015).
