OPINION

Curbing consumer borrowing

Should measures be taken to curb consumer borrowing? Of course bankers would say no. They insist that, in view of our national income, borrowing is significantly lower than in other European Union countries. The Bank of Greece, which is responsible for monitoring the credibility of our banks and for protecting consumers, does no more than politely nudge bankers. As for the government, it avoids the subject, even though it genuinely fears any exacerbation of the problems already plaguing certain levels of society. Meanwhile, industrialists and traders are rubbing their hands with glee as they are the ones reaping the most profit from this frenzied craze for plastic money. Currently, Greek households owe 57.5 billion euros – an increase of 41 billion euros in the past four years alone. However, a significant portion of loans are being given out on the basis of apparently tempting «installment» payments. This has to change; it increases the risks that consumers are unwittingly taking on and creates fertile ground for inflation hikes and overpricing of goods. The other thing that banks should do is ask their customers to pay off a larger portion of their loans at a time. The concept of «minimum monthly deposit» leads to consumers becoming burdened with interest payments they are not necessarily in the position to cope with…