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Economy

Finance Minister Presses Greek Banks to Aid Indebted Customers

ATHENS – At the same time collection agencies are hounding debtors to pay back bad loans – even if they can’t afford it – Finance Minister Christos Staikouras told Greek banks to do more to help their indebted customers.

The banks have largely sold off their portfolios of bad loans to so-called “vulture collectors” and the New Democracy government is allowing the foreclosure of even primary homes now.

But Staikouras is upset that the banks are paying virtually zero interest on deposits while raking in giant profits on high-interest loans and mortgages and assorted fees, after getting 50 billion euros ($53.1 billion) in bailouts during the lingering COVID-19 pandemic.

In a meeting that was said to be tempestuous and with resistance and blowback, the banks reportedly said they’ll try to do more to help the vulnerable to prevent creating another mountain of bad loans.

Customers are being hurt by inflation now at 8.5 percent and with supermarket prices out of sight and energy bills so high in the wake of Russia’s invasion of Ukraine that the government is heavily subsidizing them.

The government has been pressuring banks to come up with solutions to help borrowers meet their obligations.

He later told parliamentary reporters said that negotiations with bank representatives over vulnerable borrowers were “difficult” and “conducted in a negative climate,” but didn’t say why the government doesn’t intervene.

Then he said that the meeting’s result was “partially satisfactory,” since, as he said, “We are rescuing 30,000 fellow citizens,” with banks going to cover 50 percent of the raise of interest rates in their installment payments.

The Greek banks proposed a 12-month measure, which – as the government requested – will not affect the state budget since such an alternative would create problems with the ECB’s Single Supervisory Mechanism (SSM) and the Competition Commission.

During his discussion with bankers, the ministry said, he also raised the issue of banks’ fees on transactions and the extrajudicial settlement of cases and customers struggling to meet repayment plans.

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