Greece’s Largest Bank Offers Major Debt Relief To Address Humanitarian Crisis

PRESS RELEASE

Greece’s Largest Bank Offers Major Debt Relief To Address Humanitarian Crisis

April 28, 2015 (EIRNS)—The largest bank in Greece, Piraeus Bank, announced it will begin to implement the banking provisions of the government’s new legislation to address the humanitarian crisis in Greece.

In a statement, the bank said that all of its clients who fulfill the requirements in the new legislation, will have 100% relief of debts up to €20,000, for all consumer loans and credit cards.

In addition, clients who fulfill the requirements will have a payment freeze on mortgage loans and interest relief for as long as the beneficiaries are eligible under the provisions of the law. This is the first case of mass debt write-off in Greece, and most likely the first in the 19 members of Eurozone.

A statement from the bank declared that the move is designed "to address the humanitarian crisis, and reflects the general mobilization of the Bank to respond to the needs of the economy and Greek society through the changing conditions of the crisis, signaling our effort for a new beginning." Citing banking sources, the daily Kathimerini reports that this will pave the way for other Greek banks to take similar initiatives.

This move follows leadership shake-ups several weeks ago in Greece’s four largest banks, directed by Deputy Prime Minister Yannis Dragasakis, with the aim of getting the banks to begin lending to the real economy in support of government policy. Since the government bailed out the banks and now holds the largest number of shares in the banks, it is exercising its voting rights on the boards of these banks so as to get the banks to finance the economy.

One source in the Greek financial community pointed to the naming of Prof. Louka Katseli, an ardent supporter of Glass-Steagall, as chairwoman of the National Bank of Greece, the country’s second-largest bank, and chairwoman of the Greek Banking Association, as indicating the direction in which the Greek banking system is being reorganized, in order to have it funding the physical economy.