The threats of bad debts and violence
Bad debts and widespread tolerance of violence are two issues that do not appear connected, but are like two fires that may have started far apart but are now joining to create a greater new threat. The danger was predictable and is the product of a political mentality that refuses to tackle difficult things until there is no other choice, when everything is at stake. At the center of this is ruling SYRIZA which, as a party, thrilled to displays of disobedience. It is now called on to enforce laws which, if it does so, will place it irrevocably on the other side of the barricades, depriving it of support but also forcing it to reject its own myths.
Banks’ nonperforming exposures (NPEs) now total some 50 percent of loans, or about 100 billion euros. The banks are obliged to reduce this amount by 38 percent by the end of 2019, to 66.7 billion. It must be noted that in 2008 such debts were just 8 percent of the total. The crisis, along with the measures and insecurity that this spawned, shrunk the economy, reduced incomes and increased unemployment, triggering the steep rise in nonperforming loans. An important role was played also by governments which did not want to implement measures that would lead to people losing their property. The general sense of insecurity undermined the economy and caused problems for those who wanted to pay their debts but could not; it also encouraged those who, without incurring any penalty, preferred not to pay as they waited to see whether measures aimed at benefiting those in trouble would help them, too, escape paying their loans. Today it is estimated that 25 percent of nonperforming loans concerns this category of so-called “strategic defaulters.”
It is crucial for the banks’ survival that property auctions should begin; the process, however, is frozen because of the intervention of activists on the side of the debtors. Recently, in the face of threats, notaries public have suspended their participation, putting a stop to auctions. The country’s creditors have warned that if the auctions do not begin by the end of this month the latest evaluation of the government’s implementation of the bailout agreement will not be completed. This would jeopardize not only the next tranche of funds to Greece but also the hope of economic recovery, because any recovery will depend on the existence of banks able to loan money.
The government appears to have woken up suddenly, realizing that it is in danger of finding itself without its principal “narrative,” which entails exiting the bailout next August. Officials hope that auctioning properties valued at over 300,000 euros will soften the reactions. Developments, though, will depend on critics of the government who have already made their intentions clear. It is groups of the far-left, who draw their support from the same reservoir of voters that SYRIZA draws from, who have been leading protests at attempts to auction confiscated property. Auctions provide them with the opportunity to reinforce their credentials as an alternative to SYRIZA, as authentic leftists, while also making life miserable for the government. So it will be a great surprise if we see the government providing political backing to the police when they are called on to intervene on behalf of court officials against property owners and their activist supporters.
This brings us to the other major issue – the lawlessness that is spreading with such speed that it looks ever more difficult to maintain the basics of a society ruled by law. Groups of so-called “anti-establishment” types have become so accustomed to acting with impunity that any effort to cramp their style will be taken as an act of war; it will demand great determination by the government to impose order, a determination that has been noticeably lacking so far. The furlough a serial killer serving 11 life terms was granted might not have caused such alarm among serious citizens and the country’s allies if he did not have fans – if there had not been an attempt on the life of former prime minister Lucas Papademos a few months ago, if there had not been an attack with a semi-automatic weapon on police guarding the offices of the PASOK party just last week. The fans would be less dangerous if there were no killers, and the killers would wither from lack of attention if they had no fans.
Until today, Prime Minister Alexis Tsipras has acted as if he is still in opposition, when he did not seem disturbed by the existence of groups that refused to pay road tolls, taxes, debts, whatever, because he had campaigned with promises to these groups. Disobedience and disorder were confused with healthy activism. Tsipras’s aggressive avoidance of the issue in a recent parliamentary debate suggests that he will continue to act as if there is no problem, allowing the fires to rage on in the country’s foundations.
