ECONOMY

Gov’t moves to shield borrowers

The government is taking steps to increase protection afforded to borrowers defaulting on loan payments as higher lending rates squeeze disposable incomes, National Economy and Finance Minister Giorgos Alogoskoufis said yesterday. «The government is approaching the issue with sensitivity and promoting every feasible measure to help people in a difficult position due to adverse international conditions,» he said. Alogoskoufis earlier tabled a bill in Parliament which aims to shield Greek borrowers from the impact of the global financial crisis. Under the bill’s provisions, banks will not be allowed to seize from accounts money owed to them by customers, while lenders will not be allowed to repossess houses for debts of less than 20,000 euros. Also, banks will not be allowed to auction off properties at less than their official tax value – a government estimate based on a property’s size and location. Meanwhile, senior ministry sources indicated the government will guarantee all bank deposits in the country, irrespective of amount, as press reports suggested that worried savers were withdrawing savings from banks. Greek laws currently guarantee deposits of up to 20,000 euros. Alogoskoufis said, «Greece’s banking system is completely safe and solvent and… citizens’ deposits at all banks operating in the country are absolutely guaranteed.» According to Greek bankers contacted by Reuters, the value of deposits in Greece’s financial system is estimated at around 230 billion euros – roughly equivalent to Greece’s annual gross domestic product (GDP). The parliament of fellow eurozone country Ireland defied opposition yesterday from London and misgivings in Brussels by passing legislation to guarantee all deposits in Irish-only banks. This has already triggered an inflow of cash from British banks. (Kathimerini, Reuters) Piraeus Bank sees positive nine-month figures Greece’s fourth-largest lender, Piraeus Bank, will post positive results for the nine-month period, as its deposits have grown by almost half, the bank’s chairman said yesterday. Michalis Sallas said the bank was not facing liquidity problems in the wake of the global credit crunch, as the Greek banking sector was not exposed to so-called «toxic bonds.» «Piraeus has high liquidity, above the level required by the Bank of Greece, while our deposits are increasing on a daily basis, which in the nine-month period surpassed a 45 percent rate of increase,» Sallas said in a bourse filing.