Pressure on debtors is growing
The noose is tightening around state and bank debtors, as the tax administration is getting ready to carry out asset confiscations and repossessions from some 1.6 million taxpayers by the end of the year, while banks are gearing up for a wave of property auctions that will be allowed following notaries’ decision to that end.
Independent Authority for Public Revenue data show that confiscations of assets in the hands of third parties (such as tapping debtors’ deposits at banks) have proved particularly effective, accounting for 95.7 percent of forced collection measures last year.
Figures this year reveal that on a daily basis there are more than 530 confiscations from and freezing orders for bank accounts, which has created huge problems for households and businesses that are unable to meet their obligations. Given the latest increases in taxes and social security contributions since the start of the year, it is no wonder households and companies are creating new debts to the state that amount to 1 billion euros every month.
In total, half of the country’s taxpayers owe 95 billion euros while debts to the social security funds have reached up to almost 23 billion, and rising, as numerous self-employed professionals teeter closer to bankruptcy and many firms are on the brink of shutting down. It is noted that 13,280 enterprises closed down in the first five months of the year.
Meanwhile banks are preparing for the lifting of all limitations on property auctions as decided by the country’s notaries. The end to the latter’s eight-month abstention means that a backlog of more than 5,000 properties will go under the hammer in the coming weeks.
If there are no buyers at satisfactory prices, the banks are determined to acquire the assets up for liquidation for themselves in order to prevent any significant drop in values. They are already preparing their next moves through their property management subsidiaries, which will undertake the utilization of those assets and possibly sell them at a later date.
