Greek London Home ScandelIs there any sign of the London po

brit1234

Greek bank head sent savings abroad

A political row has erupted in Athens after the former head of a big Greek state bank admitted to

transferring €8m of personal savings abroad to buy a London property months before his Agricultural Bank headed towards insolvency.

Theodoros Pantalakis, former chief executive of Greece’s Agricultural Bank (ATEbank), strongly denied any wrongdoing, telling Realnews, a Greek website, that he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred.

“I’m on holiday and I don’t plan to say anything more until I come back to Athens,” Mr Pantalakis told the FT from his villa on the Aegean island of Paros. He is expected to testify on his three years at the helm of ATEbank before a parliamentary committee at the end of August, said a person with knowledge of the dispute.

Dozens of wealthy Greeks, among them politicians, bankers and shipowners, have bought high-end properties in London in the past three years seeking shelter from the country’s deepening crisis, which has left millions of ordinary Greeks squeezed by tough austerity measures.

George Provopoulos, central bank governor, said the Bank of Greece had given details of such transactions to the tax authorities.

“Nobody has suggested Mr Pantalakis sent the funds abroad illegally ... But there is clearly an ethical issue since he was serving as the head of a big state bank at time of financial and economic crisis,” said a Greek banker who declined to be identified.

Mr Pantalakis stepped down from ATEbank last month when its healthy assets were acquired for €95m by Piraeus Bank, the country’s fourth-largest lender, in a first move towards consolidating Greece’s struggling bank sector.

He strongly opposed the government’s decision to privatise the bank, arguing that it could be turned around with a €4.6bn capital injection from the Hellenic Financial Stability Fund, a vehicle for recapitalising Greek lenders using funds from its second €174bn bailout package.
A government official said Greece came under pressure from the European Commission and European Central Bank to split ATEbank into a “good” and a “bad” bank and sell its healthy assets. “The alternative they gave us was to shut it down with the loss of 5,500 jobs,” the official said.

The decision was criticised by Syriza, the radical left main opposition party, as a “great robbery”. Alexis Tsipras, party leader, said he would reverse the privatisation if he came to power, adding it had only benefited “bankrupt private bankers”. ATEbank employees staged rolling strikes last week in protest against the takeover.

Mr Pantalakis will face questions from opposition lawmakers over €150m in loans made by ATEbank to New Democracy and the PanHellenic Socialist Movement, Greece’s two biggest mainstream parties. These loans were insufficiently collateralised and remained unserviced while he ran the bank, analysts said.

ATEbank’s pension fund borrowed €130m from the bank to finance one-off payments made to retiring employees during Mr Pantalakis’s watch because of mounting losses, the analysts added.

Mr Pantalakis is also accused of failing to push ahead with privatisations of companies controlled by ATEbank that had attracted interest from potential foreign buyers, including a leading regional sugar producer and a cigarette manufacturer based in northern Greece.

http://www.ft.com/cms/s/0/353efa5a-df1f-11e1-97ea-00144feab49a.html#axzz22iz4CvVl

This is the real reason London House Prices are up last couple of years and distorting the National average. Nothing to do with London being sound economically just people from abroad using it as a safe haven. It has created a bubble on a bubble and when the London bubble pops the house price crash will increase dramatically.

Is there any sign of the London bubble popping? Well have a look at this representing serious cracks.

Property/Stamp duty hike reduces sales

The Chancellor's Budget stamp duty raid on homes worth more than £2m has triggered a 23 per cent fall in sales of properties valued between £2m and £10m in the capital, the estate agency Knight Frank said yesterday.


According to its latest prime central London index, prices rose 0.5 per cent in July and are up more than 10 per cent in the past year. Prices have now risen by 49 per cent since the post credit-crunch low in March 2009.

http://www.independent.co.uk/news/business/news/propertystamp-duty-hike-reduces-sales-8005713.html

I have already reported that Berlin has taken over from London for foreign property sales. I also think there can't be much money left in Greece or Spain to come here.

There could however be other countries under the pressure who may buy property here but many such as France and Italy have been. So I expect some more funds from these countries but both have national taxes against this now which will help reduce this.

I think personally we are coming to the end of the London bubble.

vivatifosi

I can't make the massive leap between corrupt Greek bankers and an impending collapse of London house prices, but it is an interesting story. If demand for housing continues to peter out then I expect we are in for a lean period in the housing market, but not for the whole market to cave in.

antrobus

Isn't the real scandal the fact that we have here a state-controlled bank that made €150m in loans to the two largest Greek mainstream parties (New Democracy and PASOK) that were "insufficiently collateralised" and "remained unserviced" (i.e. no interest was paid) whilst this Theodoros Pantalakis was in charge?

Graham_Devon

Theres certainly an argument here that that £8m wouldn't neccesarily have been used to buy property in London if Greece were not in financial trouble.

I'm not sure ho wmuch of a difference it will make in the grand scheme of things, as we have no idea how much money is actually flowing into London property in the same kind of way.

One thing is for sure though. That money will be taken back out of London, and it's done absolutely nothing for the London economy or Britain while it's been here. Apart from raise the cost of living for those living and working in London.

FTBFun

Brit - I see you are, again, ignoring that the prime property market is irrelevant to the rest of the property market in the capital.

Keep clutching at those straws.

Graham_Devon

FTBFun wrote: »

Brit - I see you are, again, ignoring that the prime property market is irrelevant to the rest of the property market in the capital.

Keep clutching at those straws.

How is it irrelevant?

FTBFun

Graham_Devon wrote: »

How is it irrelevant?

Because prime property is a market in itself and generally doesn't filter down to the rest of the market.

You don't have a chain with a 1 bed flat at the bottom and a £5 million property in Kensingston at the top.

There was a post on this a while ago, I'll see later if I can dig it out.

brit1234

FTBFun wrote: »

Brit - I see you are, again, ignoring that the prime property market is irrelevant to the rest of the property market in the capital.

Keep clutching at those straws.

Its not irrelevant. Foreign buyers willing to buy central London properties at any price causes displacement of those who would of bought there before causing a ripple effect outwards based on their levels of salary pushing up prices in more outer areas.

An example is people in my wage bracket. Where before London workers who could by a house in mid London now can only by a flat so they now buy houses on the edge or the next town down the railway line.

The mortgage finance at present can't and won't allow people to compete. Then you have the lower level foreign nationals desperate to protect their money who can't afford to buy multi million £ properties, they too are investing in London but just on cheaper properties further out. The knight Frank survey shows foreign purchases under £2 million are still strong.

At some point this money will fizzle out, there isn't sufficient to keep it going for ever. When that happens the bubble will burst here in London. The greek exit from the Euro will be the first big nail in the coffin but I believe its when the Euro itself fails attention turns to the UK bond market when the market will finally go under.

chewmylegoff

"Dozens of wealthy Greeks...have bought high-end properties in London in the past three years" [my emphasis]


"This is the real reason London House Prices are up last couple of years and distorting the National average."

Ha ha ha.

Graham_Devon

FTBFun wrote: »

Because prime property is a market in itself and generally doesn't filter down to the rest of the market.

You don't have a chain with a 1 bed flat at the bottom and a £5 million property in Kensingston at the top.

There was a post on this a while ago, I'll see later if I can dig it out.

OK, I understand that bit, but it's relevant in pricing.

If prime London property reduced by 30%, it would have a knock on effect to the pricing of the larger suburb homes etc.

It's isolated in terms of the buyers looking to secure such property, but it's not isolated when it comes to recording the values on the registers etc.

JonnyBravo

chewmylegoff wrote: »

"Dozens of wealthy Greeks...have bought high-end properties in London in the past three years" [my emphasis]


"This is the real reason London House Prices are up last couple of years and distorting the National average."

Ha ha ha.

I know. And in just three years!!
Imagine!
:rolleyes: