ECONOMY

State bank support plan off target

The Finance Ministry said yesterday a 28-billion-euro state bank support plan has so far failed to boost lending and prop up the country’s ailing economy, as fresh data shows loan growth continuing to slow. The plan implemented by the previous conservative government was aimed at supporting banks and funding a slowing economy but Greek lenders made little use of it. «In its current shape, the program does not provide the liquidity businesses and households need,» the Finance Ministry said in a statement. The plan provided up to 15 billion euros for bank debt guarantees, 8 billion in special government bonds and 5 billion in capital injections. The central bank says that so far, banks have used about 12 billion from the package, the biggest part of which expires at the end of this year. Greek lenders have not reported any toxic assets but their rapid expansion in the Balkans over the last decade and a slowing economy at home have hurt profitability. New Bank of Greece data highlighted yesterday the falling number of loans being pumped into the economy. Growth in borrowing by businesses and households in November slowed to an annual pace of 4.2 percent, from 4.4 percent in October. The figure stood at 15.9 percent in December last year. Growth in Greek household borrowing slowed to 3.1 percent in November, versus 3.3 percent in October, the central bank added. The Bank of Greece said household loan balances grew by 401 million euros in November. Mortgages grew at a slower 3.7 percent annual pace, or 270 million euros, from 4.0 percent in October. In the 16-nation eurozone, loans to households and businesses fell by 0.7 percent from a year earlier in November, remaining in negative territory after their first-ever annual decline in September, according to the European Central Bank.