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New Democracy is one step before going bankrupt after bank claims loans

Greece’s main opposition party, conservative New Democracy, is one step before going bankrupt after one of Greece’s systemic banks claimed its loans.

According to newspaper Agora, Piraeus Bank asked the full amount of loans to ND. The total amount is 160million euros, incl. loan €131million plus arrears and surcharges. The plaint has been reportedly submitted last Friday. The plaints give ND a period of 100 days to submit evidence about the loan repayment, and another 100 days to a judge to rule on the case.

Reports claim that ND was able to serve its loans until 2010, but it became difficult for the party to do so afterwards due to “low election rates, increased expenditure and decreased state funding.”

Greek political parties have been receiving bank loans using as collateral the state funding they received; often this included also rates of future elections.

It is not clear whether the party bank accounts will be blocked. And even then, when it comes to loans or debt repayments, priority have the social security funds (IKA) and the tax office and then the banks.

Bank of Greece governor, Yannis Stournaras, had recently said that loans of political parties can be transferred to foreign funds.

A similar move from Piraeus Bank expected also with regards to the loans of socialist PASOK.

Deputy CEO of Piraeus Bank had recently told the Parliament that the total amount owed by ND and PASOK to the bank is 240million euros.

The news triggered the reaction of ruling party SYRIZA that said in a statement “the news exposes ND leader Kyriakos Mitsotakis who has recently claimed that the party’s loans are being served.”

According to, “the amount the Piraeus Bank wants back is approximately half of the total borrowing of ND to systemic and non-systemic banks, as party leader Mitsotakis admitted in the Parliament. Based on an internal ND report, Mitsotakis spoke of a total borrowing of over 300 million euros. “the question is whether the ND leader had wrong information or he lied when he said that the loans are being served.”

How comes that the banks now want the repayment of the loans to Greece’s holy cows, the political parties?

Website, notes that last summer the management of Piraeus bank was replaced after the resignation-removal of bank president Michalis Salas who served at this post for 25 years. The website reminds also that according to evidence submitted to the Parliament, “ND and PASOK do not serve also loans they had received from the Attica Bank.”

Point is that after several recapitalization, Greek banks are in the hands of the international lenders, who apparently show no mercy even to Greece’ political parties.

PS much to my knowledge, there has been no official reaction by New Democracy so far.

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