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Hanging loans accounted for €2.5 billion

07 January 2010 / 13:01:32  GRReporter
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Business loans worth over €2.5 billion are expected to be settled after the bill for regulating the duties of industrial companies to financial institutions, is passed. This concerns companies that have difficulties in covering their debts to banks and other financial organizations. According to experts the new ordinance will come to vote at the end of January this year because the Ministry of Economy, Development and commercial fleet is expecting the approval of the bill by the European Central Bank (ECB). 

Banking experts believe that the bill is not worded correctly and does not contribute to a real increase in market liquidity, but only encourages rogue paying. So far, about 250 thousands of enterprises are facing difficulties to meet their monthly obligations, 30 thousand of which have temporarily suspended payments to contracted amounts. Other five thousand have stopped paying off their debts and are expected to declare bankruptcy, if the new law does not come in effect earlier. 

According to bankers in its current form the bill for regulating debts of companies in economic difficulties is ineffective, because 90% of the cases relate to companies which have stopped paying off their debts. This way the bill will cover the "holes" in improper payments of companies without creating additional liquidity and prerequisites for expanding the market. Solution to the problem will come if the Ministry of Economy revises the initial ordinance and introduces some changes. For example, a subject of assistance can be only companies, which are experiencing temporary difficulties, but have not stopped all payments.

Tags: Banks in Greece Economy Loans debts European Central Bank
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