Greek crisis deepens; bad loan rate spikes


Greece, the nation hardest hit by the Great Recession, continues to stagger under the burdens imposed by the European Central Bank, the European Commission, and the International Monetary Fund.

The Troika, operating as the European Stability Mechanism, has imposed onerous pay and pension cut, mandated layoffs, forced the sale of billions in national assets [including power grids, healthcare institutions, toll roads, railways, ports, and even islands], while Greeks continue to suffer from massive unemployment.

And now the crisis is getting worse.

From Kathimerini:

Nonperforming loans last month posted a major spike of almost 1 billion euros, reversing the downward course set in the last few months of 2016. This has generated major concerns among local lenders regarding the achievement of targets for reducing bad loans, as agreed with the Single Supervisory Mechanism (SSM) of the European Central Bank for the first quarter of this year.

Bank sources say that after several months of stabilization and of a negative growth rate in new nonperforming exposure, the picture deteriorated rapidly in January, as new bad loans estimated at 800 million euros in total were created.

This increase in a period of just one month is considered particularly high, and is a trend that appears to be continuing this month as well. Bank officials attribute the phenomenon to uncertainty from the government’s inability to complete the second bailout review, fears for a rekindling of the crisis and mainly the expectations of borrowers for extrajudicial settlements of bad loans.

Senior bank officials note that a large number of borrowers will not cooperate with their lenders in reaching an agreement for the restructuring of their debts, in the hope that the introduction by the government of the extrajudicial compromise could lead to better terms and possibly even to a debt haircut.

Advertisements

One response to “Greek crisis deepens; bad loan rate spikes

  1. Pingback: Chart of the day: Greek unemployment by gender | eats shoots 'n leaves

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s