Hellenic Bank Association
Brussels and Frankfurt were displeased on Thursday to learn of statements by Deputy Prime Minister Yiannis Dragasakis and Finance Minister Euclid Tsakalotos on Wednesday, according to which there is a deal between the government and the banks that no homes valued at less than 300,000 euros should be sold at foreclosure auctions.
The managing director of the International Monetary Fund, Christine Lagarde, is to meet on Thursday afternoon with the head of the Hellenic Bank Association, Nikos Karamouzis, and executives of Greek banks in London.
The aim of the meeting is to convince the Fund of the stability of Greek banks, according to sources.
Entrepreneurs with debts to the state and the banks will as of August 5 be able to apply to settle their arrears under the so-called extrajudicial mechanism, while according to the deputy governor of the Bank of Greece, Theodoros Mitrakos, online property auctions will be in full swing by late August.
The President of the Hellenic Bank Association, Nikos Karamouzis expressed his grave concerns about the dangers for the country’s systemic banks in relation to the non-performing loans. The Greek banker went on question the effectiveness of the legislation submitted by the Greek government regarding the issue of out of court settlements for arrears.
The Hellenic Bank Association is asking for changes to the bill on the extrajudicial settlement of debts to lenders, warning it could turn into a refuge for strategic defaulters.
Bank officials note that unless some modifications are made the new mechanism will torpedo the effort to reduce nonperforming loans, which would have dramatic consequences on the banks' capital base.