The borrowing trap

According to recent research by Eurostat, nearly half (49 percent) of all families living in large Greek cities have serious problems making ends meet and face a real nightmare at the end of every month when the time comes to pay their installments – for their car, mortgage, credit card and so on. The worst thing is that such desperation often leads to yet more borrowing. According to figures released by the Bank of Greece, some 2.7 million households are in debt to banks. The number of mortgages, consumer loans and credit cards being issued by banks is increasing at an alarming rate. During the first six months of this year alone, a total of 1 million consumer loans and 2.2 million new credit cards were issued. The total debt owed by Greek households so far this year is estimated at 57.6 billion euros, as compared to 31.5 billion euros in 2002. Evidently, difficulties with repayment and excessive interest rates (the highest in the European Union) lead to yet more borrowing and more credit cards. And, of course, those who pay the most for borrowed cash are the poor, as they have fewer assets and guarantees to offer the banks they approach for loans. For those who are less fortunate in our country, life has become a vicious circle of living from hand to mouth and looking for new ways to borrow more money for unavoidable expenses while spiraling ever deeper into debt.