Greece endured a significant increase in the cost of borrowing in 2017 even though interest rates in Europe are at a historic low.
The Review of the Hellenic Credit System, issued on Thursday by the Bank of Greece, showed that the difference of the net interest margin of all loans from the average interest on deposits amounted to 2.6 percent in the first nine months of last year, against 2.3 percent in the same period in 2016. This rate is twice the equivalent in the European Union (1.3 percent).
That is despite Greek banks’ net operating revenues reaching 3.245 billion euros in the same period, far above those of European banks in proportionate terms. The profits of local lenders are lost in the black hole of nonperforming loans as in this period some 2.82 billion euros were channeled toward tackling NPLs.
Therefore, just as the minority of law-abiding taxpayers are overtaxed so that the state can keep functioning, the few consistent borrowers and the dynamic part of the economy are burdened with high loan interest rates.