Banks ought to finance real economy, says Tsipras after meeting central banker

To Stournaras, noted the main opposition party leader, he conveyed his “concern about the large increase in private debt over the last 3.5 years, an increase of approximately 40 billion euros,” and also the increase in non-performing loans that he said now approached 110 billion euros.

These economic facts, Tsipras noted, along with the inflationary crisis and the increase in lending rates “is creating a new generation of ‘bad’ loans, as thousands of borrowers who were servicing their loans are now unable to do so.” A broader social problem is therefore gerenated, Tsipras added, especially since “the new bankruptcy law – passed by the New Democracy government – removes protections of one’s primary residence, and no longer compels creditors to reach settlements with borrowers.”

Moreover, Tsipras continued, bearing in mind that equity profit rates for Greek banks are three times those of German banks and deposit rates remain fixed – while lending rates exceed 5% against a 2% European average – Greece is facing a situation that cannot be tolerated, he said.

The main opposition leader did, however, say that “it is, perhaps, premature to talk about profit dividends to bank shareholders (…) when banks today are kept afloat thanks to deferred tax and the recurring recapitalizations financed by Greek taxpayers’ money.”

Asked about whether his assesment converged with Stournaras’, Tsipras said that “there is a fruitful exchange of views, and that is the first important step.”