Distress Funds Gobble Up 20 Billion Euros Greek Banks Bad Loans

Αssociated Press

FILE - A man walks outside the headquarters of the Bank of Greece, in central Athens, on Monday, Jan. 28, 2019. (AP Photo/Petros Giannakouris)

ATHENS - Buried under a mountain of bad loans, Greece’s four big banks have been able to sell off some 20 billion euros ($22.5 billion) to distress funds to hound debtors, many unable to pay because of repeated pay cuts, tax hikes, slashed pensions and worker firings.

The banks had already gotten 50 billion euros ($56.25 billion) in a bailout from 326 billion euros ($366.76 billion) successive governments got in three rescue packages from international lenders and were allowed to start foreclosing on homes, as Prime Minister and Radical Left SYRIZA leader Alexis Tsipras broke a promise to protect homeowners.

The funds are expected to buy another 33 billion euros ($37.13 billion) more, confident they can get people to repay where the banks can although apparently not being chased are the former ruling New Democracy Conservatives and its former partner, the now-defunct PASOK Socialists, who owe 250 million euros ($281.26 million,) with the bank officers who approved the loans being given immunity from prosecution.

Greek banks and bad loan servicers together hold some 100 billion euros ($112.5 billion) worth of bad loans and aim to get rid of 30 billion euros ($33.75 billion) in the next three years if they can.

So far, 17 distress funds have been licensed for operation in Greece after Tsipras broke another promise that they wouldn’t, and another five are expected to open soon, the business newspaper Naftemporiki said.

The funds now employ about 2,000 people, many tasked with repeatedly calling people demanding they pay what they owe while the government is holding back payments to people owed money by the state to build up a primary surplus by not paying bills.