ATHENS – Greek banks are scrambling to come up with a plan to deal with 75 billion euros in bad loans as Greeks crushed by austerity measures have been unable to pay their obligations.
The Bank of Greece is expected to deliver its latest code of ethics for the sector that reportedly will include offering debtors better terms for restructuring their loans, mortgages and credit cards.
Kathimerini said that will include lower interest rates, a longer time to repay, decreased interest rate margins, changes of interest rate type without any penalty charges, loan replacements, as well as payback period extensions.
It wasn’t said if that includes the 250 million euros owed by the ruling New Democracy Conservatives of Prime Minister Antonis Samaras and his partner the PASOK Socialists, who aren’t paying, even though they get state monies and are cutting staff and expenses in their parties.
Business loans are said to be the most troublesome with many enterprises struggling to stay operating even as the government has hit them with big tax hikes and increased assessments on properties that have plummeted in value because of big pay cuts, tax hikes, slashed pensions and worker firings during record unemployment and deep poverty.
The soaring numbers of Non-Performing Loans (NPLs) is also limiting banks’ ability to offer loans to good customers because of a cash crunch. Samaras set aside a plan that would have offered relief to heavily-indebted households and is allowing banks to foreclose on homes even if people can’t pay because of austerity.