Mitsotakis, Stournaras discuss plans to address bad loans

Mitsotakis, Stournaras discuss plans to address bad loans

The president of main opposition New Democracy party, Kyriacos Mitsotakis presented his party’s plans to tackle non-performing loans (NPLs) if he wins a general election next year.

Mitsotakis met with Bank of Greece (BoG) governor Yannis Stournaras on Monday to discuss the crucial issue of NPLs, which have been threating to cull Greece’s economic recovery. The conservative party’s shadow finance minister, Christos Staikouras and Mitsotakis’ chief of staff, Stelios Petsas also attended the meeting.

Mitsotakis said guaranteeing banks’ liquidity is a necessary priority. “A bold but fair settlement for bad debt is necessary for real relief of households’ burdens and businesses’ viability,” he said. Following a decade-long economic crisis, NPLs in Greece exceed 85 billion euros in total.

The ND plan involves offering debt relief to individuals, households and business that have not been proved to be strategic defaulters. It also introduces a scheme to protect owners from losing their primary homes, with most cases of bad debt being dealt with out of court.

The two men agreed that the Greek economy, stock market and businesses cannot grow sustainably without the backing of a healthy banking system. It was also agreed that international investors must be sent a message from the Greek economy that it is on the mend.

The BoG governor has been making plans to assist Greece’s lenders to reduce their non-performing exposures (NPEs). On Thursday, the BoG plan will be presented in detail. According to information, it will entail the transfer of 42 billion euros worth of NPEs to special purpose vehicles (SPVs). ND will take a position in the plan when it is unveiled, Mitsotakis said.

Meanwhile, Greek bank stocks continued to drop sharply on Monday at the Athens Stock Exchange. The country’s four systemic lenders have seen their capitalization cut in half since the start of the year./IBNA