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Greece’s Prime Minister Alexis Tsipras

In Greece leftist prime minister Alexis Tsipras has urged banks to do more to clamp down on big time debtors, citing the banking system’s record stock of non-performing loans.

Helena Smith reports from Athens:

In a no-holds barred speech Tsipras told leading bankers today that the time had come to crack down on big-time debtors and strategic defaulters as part of efforts to restore liquidity to Greece’s cash-strapped economy.

Those who had allowed bad debt to bust businesses, but done well themselves, had to be “chased,” he told bank representatives assembled at his office, adding:

“Liquidity needs to be restored to the economy … We need a responsible and effective way to deal with the problem of non-performing loans.”



By failing to effectively deal with NPLs – of which Greece has the highest amount in the EU – and provide funding for others, he said, banks were failing to properly support young Greeks in fulfilling their dreams.

Describing the role of banks as crucial, the leftist leader also called for the creation of an “observatory” that could advise the government on what banks could offer. With less than a year before the debt-stricken country’s third international bailout officially expires – ending, it is hoped, an era of international supervision – the government is keen to improve daily life.

On Friday the International Monetary Fund also cited bad debt as a major obstacle for Cypriot banks despite the island’s impressive economic recovery after its own crisis in 2013.

NPLs in Cypriot banks amount to 46% of loans -- after Greece the highest amount in the EU.