Thursday October 23, 2014 Search
Weather | Athens
24o C
14o 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 sector’s 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. “It’s 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)  
Athens weighs its LNG and CNG options
Greece ranks among global leaders in tourism growth
Global oil price drop sends local fuel prices back to 2010 levels
Buy big house, become a citizen
Cyprus seeks EU response over Turkey´s EEZ violation
Cyprus is to raise the issue of Turkey’s violation of its exclusive economic zone (EEZ) at Thursday’s European Council meeting after Turkish Prime Minister Ahmet Davutoglu raised the specter...
Thirteen indicted for inmate torture
Thirteen correctional officers and their former warden will stand trial in Serres, northern Greece, over the death of Albanian inmate Ilie Kareli on March 27 at Nigrita Prison. Kareli was tr...
Inside News
SOCCER
Roberto´s heroics make Kasami´s goal count
Pajtim Kasami’s goal and Roberto’s heroics in goal saw Olympiakos claim one of the biggest wins in its history on Wednesday downing Italian champion Juventus 1-0 to boost its chances of reac...
SOCCER
Third-division Iroditos punished heavily after fan death
Greek third division team Irodotos has been docked 15 points and ordered to play 10 matches behind closed doors following the death of an Ethnikos Piraeus supporter, the Hellenic Football Fe...
Inside Sports
COMMENTARY
Careful what you wish for
Everyone is in a rush to become prime minister in this country, as if they have not learned a single thing from its political history. While still in opposition, PASOK’s George Papandreou ma...
EDITORIAL
Taking care of our key industry
It’s time to face facts: Tourism is the country’s heavy industry. The sector’s considerable contribution has served as a stabilizing factor for the local economy, essentially placing the cou...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Roberto´s heroics make Kasami´s goal count
2. Athens weighs its LNG and CNG options
3. Greece ranks among global leaders in tourism growth
4. Global oil price drop sends local fuel prices back to 2010 levels
5. Buy big house, become a citizen
6. Cyprus seeks EU response over Turkey´s EEZ violation
more news
Today
This Week
1. At least 11 banks to fail European stress tests, three in Greece, report says
2. Cyprus to block Turkey's EU talks after EEZ violation
3. EU’s Juncker wins Commission-team approval with investment vow
4. Juncker’s EU commission team set for parliamentary green light
5. Taprantzis resigns from privatization agency TAIPED
6. Fallen tree, smashup cause traffic jams in Athens
Today
This Week
1. Istanbul skyscraper casts shadow over Greece's banking ambitions
2. Coalition shooting itself in the foot
3. Greece’s closed society is central to its current malaise
4. Greece must stick to reforms, says Schaeuble
5. The past, present and future of the Greek debt crisis
6. Samaras’s crumbling Greek exit lacks backing from economists
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.