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ATHENS – Inspectors from international lenders have asked Greece’s government to come up with a plan to deal with bad loans for both corporate and household debt.

An unidentified Finance Ministry official who attended talks in Athens on Oct. 7 told the state-run Athens Macedonia News Agency (AMNA) said that the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) had rejected Greece’s plan to deal with only corporate debt.

With bad loans caused largely by harsh austerity measures demanded by the Troika hitting 80 billion euros ($100.8 billion) the lenders want households to pay too.

The Finance Ministry had planned to first introduce a scheme addressing corporate debt with household bad loans being the subject of separate legislation at a later date.

“There is still a lot of work that needs to be done,” the official told the AMNA, adding that it is likely the new legislation will be presented to Parliament after the Troika’s return in late October or early November, following the publication of EU-wide bank stress test results.

Greek banks have the highest level of Non-Performing Loans (NPLs) in Europe as people strapped by big pay cuts, tax hikes, slashed pensions and worker firings have been unable to pay mortgages, credit cards and loans.

Among the biggest of the bad loans is 250 million euros ($315.2 million) owed by the New Democracy Conservatives of Prime Minister Antonis Samaras and his coalition partner the PASOK Socialists, who aren’t paying, but who want businesses and homeowners to pay theirs.

Greece’s top four banks – Alpha Bank, Eurobank Ergasias, National Bank of Greece and Piraeus Bank – have already raised a combined 8 billion euros of equity capital this year to help cushion against loan losses but there are concerns that they may need to raise more unless measures are introduced to facilitate repayment.

The post Greece’s Bad Loans Worry Troika appeared first on The National Herald.

Source: The National Herald
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