Thursday October 2, 2014 Search
Weather | Athens
28o C
16o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Banks responsible for consumer loan bubble

By Yiannis Papadoyiannis

The role of the credit system in the consumer model that came to dominate Greece in recent years, at the expense of production and the real economy, is revealed by the details of loans issued.

The sum of the banking sectors loans to economic domains such as agriculture (1.5 billion euros), tourism (7.3 billion) and shipping (14.2 billion), where the country holds a comparative advantage, comes to just 23 billion euros, while consumer loans in the same years exceeded 32 billion euros, according to official figures.

In fact, the consumer loans issued are 45 percent higher than those provided to the industrial sector and a staggering 215 percent more than those to the construction sector. Loans to mass media companies were twice as high as those issued for agricultural development, and loans for the acquisition of cars are estimated at 5 billion euros.

The above does not include non-performing loans that banks have now written off, many of which concerned credit provided to friends, relatives and other such recipients.

The picture painted by the structure of loan portfolios clarifies the general responsibility of the political and economic system in the expansion of the model of overconsumption. Some 14 percent of all loans today (which add up to 231.8 billion euros) concern consumer credit, while another 75 billion euros (or 32.4 percent of the whole) has been given to households to cover housing needs. Combined with Greeks traditional affinity for homeownership, this massive transfer of funds led to huge expansion in housing development in Attica in particular and to a rise in prices even in areas that had no access to modern public transport means or green spaces.

Bank officials tell Kathimerini that the credit sector clearly carries a share of the responsibility in the emphasis placed on issuing consumer loans. However they note that banks are not responsible for drafting policies or for the quality of business initiatives, saying that creditable borrowers are also largely to blame. Its not the banks fault if the average Greek has abandoned agriculture in favor of opening cafes and so on, one source said.

ekathimerini.com , Sunday November 25, 2012 (21:15)  
Attica Bank said to have rejected notable offers
PMI index slides anew in September
Costa Navarino to host big events
Construction of F1 circuit at Patra to start by year-end
Terror group link prompts police raids and arrests
Police found a Kalashnikov assault rifle, a handgun, a hand grenade and numerous bullets Wednesday while searching homes in Athens and Thessaloniki used by six people who were detained and a...
Samaras to seek confidence vote in bid to rally coalition
The government said on Wednesday that it will request a vote of confidence when Parliament reconvenes after the summer recess next week, seeking to douse speculation about early elections an...
Inside News
SOCCER
Rosenberg punishes Olympiakoss errors at Malmoe
A disappointing Olympiakos got the worst possible result from its clash with Malmoe in Sweden for the Champions League, going down 2-0 on Wednesday due to its own defensive errors and attack...
SOCCER
All team sports suspended next weekend in memory of dead fan
The government announced on Monday the suspension of all team sports events in Greece scheduled for next weekend, October 4 and 5, in the memory of the Ethnikos Piraeus fan who died a few ho...
Inside Sports
COMMENTARY
Truth before the battle
The coalition has lost its sense of direction in the last few months. Exactly where things went off track is not the question at this stage. What is certain is that if it continues competing...
EDITORIAL
Bending the rules
The flexibility with which laws are implemented has been a fundamental cause for concern in Greece during the post-dictatorship era. Everything becomes a subject for negotiation, even in cas...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Rosenberg punishes Olympiakoss errors at Malmoe
2. Terror group link prompts police raids and arrests
3. Samaras to seek confidence vote in bid to rally coalition
4. Attica Bank said to have rejected notable offers
5. PMI index slides anew in September
6. Costa Navarino to host big events
more news
Today
This Week
1. Air-raid sirens to go off all over Greece at 11 a.m. in drill
2. Mario Draghi to push ECB to buy Greek, Cypriot 'junk' loans: FT
3. Truth before the battle
4. Smallpox decimates sheep stocks in northern Greece
5. Thessaloniki transport gets more expensive
6. Bending the rules
Today
This Week
1. Greece may opt for unusual president to avoid snap polls, Venizelos says
2. Woman allegedly buried alive by accident in northern Greece
3. Salaries in Greece continue to slide, dipping 1.4 pct in Q2
4. Should you bet with Kissinger on where the world is heading?
5. Cypriots divided by 1974 war seek Shariah hub
6. The shocking thought of euro-dollar parity
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.