As Greek Prime Minister Antonis Samaras’ coalition government plans to recapitalize the country’s banks with a $64 billion injection, it is also going to freeze home foreclosures in 2013, but has offered beleaguered consumers no help, although many can’t pay consumer loans because of a series of pay cuts, tax hikes and slashed pensions.
Development Minister Costis Hatzidakis unveiled a proposal to the Hellenic Bank Association which provides for a grace period of four years on mortgage loans, with borrowers being allowed to pay only a fixed rate of 1.5 percent and repossessions and auctions halted for next year. The amount of the loan repayment cannot exceed 30 percent of a borrower’s monthly income.
But while the plan provides help for homeowners, it does nothing for those who rent and who are buried under consumer loans and credit cards they can’t pay. Already, more than 25 percent of Greeks have stopped paying banks but many are still being hounded anyway.
Austerity measures imposed by the government on the orders of international lenders have put nearly two million people out of work and closed 68,000 businesses, with scores of thousands more teetering on the brink of bankruptcy.
Borrowers associations criticized the government morning for saying nothing about consumer loans or about reducing interest rates for borrowers. “It forces borrowers to pay eternally for their loans,” said Panayiota Kalapotharakou, Director of consumer association EKPIZO on Skai television.
Deputy Development Minister Thanasis Skordas told SKAI radio that, “The government is not trying to impress borrowers, but to help them,” but offered them no help. He said the government’s interest was in protecting banks driven to near-insolvency after a previous government imposed 74 percent losses on investors holding Greek bonds that became almost worthless. Skordas said the government does not want to upset the capital adequacy the state could secure after the recapitalization of the banking system.
(Source: Kathimerini)
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