Debt Drowns Austerity-Crushed Greeks

ATHENS – With the government having reneged on a promise to provide relief for households besieged by repeated rounds of pay cuts, tax hikes and slashed pensions, many Greeks are under water, faced with growing debt they can’t pay.

Newly-released statistics showed that overdue obligations to the state increased by 1.1 billion euros ($1.49 billion) in October, reaching 7.2 billion euros ($9.78 billion).

The data showed that most Greeks are setting aside current bills in a frantic bid to try to cut down the backlog but can’t keep up. Many are getting by only by emptying what savings they accrued before the country’s economic crisis began 3 2/1 years ago.

Greek have withdrawn 1.3 billion euros ($1.76 billion) from banks to pay their bills, further depleting the ability of the institutions to lend and try to provide a boost to the shrinking economy.

The General Secretariat of Public Revenue, Harry Theoharis, has given orders to excise tax offices to be more lenient towards taxpayers who pay even a small amount of their total debt, on a monthly basis.

The government still, however, has failed to make much of a debt in the monies owed by tax cheats. A number have been arrested in well-publicized crackdowns but there have been only a handful of major prosecutions with the courts showing leniency toward those who owe many millions of euros while the government chases taxpayers who owe far smaller amounts.

Greek  banks have also seen non-performing loans (NPLs) soar to as much as 42 percent in some categories, including mortgages, credit cards and loans as more people simply can’t pay despite demands by banks they pay in full in most cases.

That doesn’t include the ruling New Democracy Conservatives of Prime Minister Antonis Samaras and his coalition partner, the PASOK Socialists of Evangelos Venizelos, who owe banks 250 million euros ($339.8 million) and aren’t being required to pay. The loan officers who approved the deals were given immunity from prosecution for failing to require collateral.