Households buckling under debts

A growing number of households are struggling under the weight of mortgage and consumer loan payments, according to data unveiled yesterday, as the depth of Greece’s economic recession worsens. Survey figures presented by Kappa Research showed that 32.3 percent of the people questioned with some form of debt believe that they will not be able to keep up with credit installments in the coming year. The percentage of households currently making late loan payments – or not making them at all – amounted to 31.8 percent of respondents, with most delaying on consumer loans. Just below 3 percent of households have simply given up trying to keep up with monthly bank demands with the majority of slow payers, 17.8 percent, delaying by up to a month. The study, commissioned by the General Secretariat for Consumers, questioned 2,085 people from March 4 to 8, immediately after the Socialist government unveiled 4.8 billion euros’ worth of austerity measures in a combination of spending cuts and higher taxes. The measures, aimed at lowering the government’s budget deficit this year by 4 percent, follow a recessionary year for Greece in 2009 and may result in the economy contracting by up to 4 percent this year, according to some economists. The government has responded by preparing a draft bill that enables households in financial straits to renegotiate loan terms that would help save their home from being repossessed by the bank. Critics say that the draft bill, likely to be submitted to Parliament in the coming weeks, encourages loan holders to be less disciplined and could lead to liquidity problems in the country’s financial system. [email protected]

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