More than 300,000 borrowers and credit card holders are unable to pay their installments in time, while about 100,000 loan recipients are in the so-called «black list» of the financial information services company Tiresias. In addition, farmers owe the Agricultural Bank alone 1 billion euros; nearly 15,000 private cars will be auctioned by banks; bounced checks and unpaid bills of exchange are piling up day after day; and dozens of companies, listed or not, are facing huge liquidity problems which are aggravating because of their immense debts to banks and suppliers. The general picture in Greece is of thousands of enterprises and households walking the tightrope of debts to secure short-term liquidity. The recovery signs of economic activity that come with the rise in the stock market, the containment of inflation and the increase of disposable income cannot immediately help those in debt. Economy and Development Ministry officials suggest that the positive consequences from the reforms in the tax and investment incentives laws need at least a year to have a visible impact. Nevertheless, bank analysts predict a decline in inflation, while Bank of Greece data are showing some «preliminary signs» of recovery of business activity in the coming months and an increase of disposable income. Delays of more than three months in the payment of loan installments by households and enterprises have increased significantly, creating worries both in the Bank of Greece and in commercial banks. According to the central bank, delays beyond three months rose last year by 16.4 percent against 9.7 percent in 2003. Bank officials believe that this rising rate continues today. The ratio of delays to overall loans rose to 7 percent last year. This breaks down to 4.6 percent of mortgages, 7.2 percent of consumer loans and 7.8 percent of corporate loans, with the latter being the only ones to post a rise. The risk increases as households and companies are more burdened with loans directly linked with the course of interest rates. This resulted in more interest burdens last year, according to the Bank of Greece, rising to 2.8 percent of the gross domestic product from 2.5 percent in 2003. The same figure in the eurozone is 4.7 percent. Company borrowing Companies have borrowed 67.3 billion euros. Some 9 billion of that is delayed over three months. The central bank found in a survey of 554 companies that the ability to repay obligations is currently satisfactory, but is on a downward course. The bank believes the ratio of pre-tax profits to the sum of obligations should not exceed 10 percent. In the companies surveyed this figure was at 41.1 percent, down from 45.3 percent in 2003. Listed companies show a rather disappointing picture in their 2004 financial reports. Pegasus stockbrokerage company suggests that they face a major problem in the fast receipt of their requirements, which makes their liquidity problem worse. They therefore delay more in paying their suppliers, while their short-term borrowing threatens their liquidity. On the parent-company level the average speed of requirement receipts has reached 235 days, and the average speed of payment of short-term obligations lies at 68 days. Among non-listed companies the situation is not better. Hellastat data from 27,000 companies show their total loan obligations with interest to have risen by 8.2 percent last year from 2003, following a 12 percent rise the year before. The «black list» of Tiresias has more than 1.5 million entries regarding mortgages, unpaid bills of exchange, broken loan contracts, bankruptcies and the like. The financial information system has recorded 58,555 bounced checks in the year’s first half, of total value of 666 million euros, a yearly rise of 0.16 percent. At the same time there were 6,103 unpaid bills of exchange worth a total of 79.4 million euros. In 2004 payment orders rose by 59.5 percent year-on-year, bankruptcies increased by 4.6 percent and bounced checks rose by 33.2 percent. The total debts of the 315,000 borrowers who delay repayment beyond three months is 3.1 billion euros. Some 1.7 billion of that comes from 35,000 mortgage borrowers. The rest is from 280,000 people who have taken consumer, personal and open loans and credit cards, and delay repayment beyond three months. Banks actually believe the true picture is much worse. Borrowers and credit card holders resort to balance transfers, loan refunds and debt repayments with a minimum installment (instead of a full one), concealing the problem in a sense, while debts never end and will come to the surface sooner or later. Those debts are usually concealed through loan refunding. Borrowers take a new loan with more favorable terms (usually lasting longer) to repay the old one. Another popular practice is the transfer of loans and credit cards from one bank to another. The market already has many programs for credit card balance transfer with an interest that starts from 1 percent, as well as any loan-type transfer products, with an interest rate ranging from 5.4 to 8.5 percent. Every year about one million balance transfers take place, mostly of credit cards, so debts of over 1 billion euros change banks. If this is added to the loan repayment delay figures, then the ratio of 7 percent of all loans rises considerably and the debts that cannot be served exceed 4 billion euros, from 3.1 billion euros today. «Minimum installment» is another dormant problem. This means in practice that a cardholder who made a 2,000-euro purchase and must pay the whole amount after 35 days, can pay just 30 euros then. This way the borrower is virtually never free from debts, as the minimum installment corresponds to part of the interest, while the capital is unchanged.