Ma­jor Greek bank to wipe the debts of poor­est clients

The China Post - - WORLD BUSINESS -

One of Greece’s largest banks is to wipe away the debts of clients who owe up to 20,000 eu­ros (US$21,600) in a one-off ges­ture to ease the bur­den on its cri­sis-hit cus­tomers.

The Bank of Pi­raeus de­cided to write off or re­struc­ture debts in re­sponse to the “hu­man­i­tar­ian cri­sis” through which its poor­est clients were living, the com­pany said in a state­ment.

Debts of up to 20,000 eu­ros linked to credit cards and con­sumer loans would be writ­ten off com­pletely, it said, while mort­gage pay­ments would be frozen and any as­so­ci­ated in­ter­est for­given.

Sev­eral bank bosses have left their posts since Greece’s rad­i­cal left Syriza gov­ern­ment came to power in Jan­uary, with Pi­raeus a no­table ex­cep­tion.

Clients must al­ready be en­rolled in a newly launched gov­ern­ment benefits scheme to be el­i­gi­ble for the debt re­lief.

Syriza pushed new so­cial safety net leg­is­la­tion, part of the plat­form on which it was swept to power, through par­lia­ment last month de­spite pres­sure from the EU to drop the mea­sures.

It also in­cludes hous­ing sup­port and sub­si­dized food pur­chases to aid those who have fallen into poverty as a re­sult of the EU-IMF aus­ter­ity mea­sures im­posed on the coun­try.

Greek banks are in des­per­ate need of liq­uid­ity, with ac­count hold­ers with­draw­ing 25 bil­lion eu­ros be­tween early De­cem­ber and late Fe­bru­ary on fears about Greece de­fault­ing un­der Prime Min­is­ter Alexis Tsipras’ gov­ern­ment.

Greek banks are largely de­pen­dent on the ECB for fi­nanc­ing, but the eu­ro­zone’s cen­tral bank no longer ac­cepts Greek sovereign bonds as col­lat­eral for loans.

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