ECONOMY

Forced property sales from banks put on back burner

Bank customers in financial strife who owe less than 200,000 euros to lenders will be given a few months’ breathing space as the government prepares an amendment to temporarily suspend forced property auctions. Economy and Finance Minister Yiannis Papathanassiou approved the measure yesterday after meeting with the Hellenic Bank Institute, which represents 27 lenders operating in Greece, in a move aimed at protecting those in danger of losing their homes due to the crisis. The Justice Ministry is expected to submit the amendment to Parliament soon. The decision has fueled speculation that the government is preparing to call early elections, with political commentators describing it as one of the ruling conservatives’ steps aimed at shoring up its ailing popularity. The news comes after Monday’s announcement from the Finance Ministry saying that the way value-added tax (VAT) is paid by small and medium-sized businesses will change to help ease the liquidity squeeze on the market. Companies will now have three months to pay the tax rather than being forced to pay it in total when making the VAT declaration. It was not immediately clear how many people face the risk of losing their home due to a forced sale. Senior bank officials have described the number of property repossessions as being «very small» in comparison with the size of their total portfolios. The Coalition of the Radical Left (SYRIZA) party described the measure as a public relations ploy from the government at a time when banks are showing massive profits despite the crisis. Sources added that Papathanassiou also spoke with bankers about the credit squeeze among small to medium-sized businesses but said no decison had been made on the issue. Banks agreed to look into ways to limit the use of postdated checks and to protect those who end up with bounced checks, one source added. Data for the first seven months of the year shows the value of checks that had not being honored in Greece’s financial system reaching almost 2 billion euros, rising more than threefold over last year’s levels.