Elected on a promise to protect ordinary Greeks from austerity measures, Syriza is now struggling to implement them.
THESSALONIKI, Greece — As opposition leader, Alexis Tsipras promised that “not a single house” would be taken from Greeks who can’t pay their mortgage.
It’s now haunting him as prime minister.
Tsipras’ left-wing party Syriza came to power on a wave of popular protest at the height of the European debt crisis. After a dramatic showdown with Greece’s international creditors in July 2015, Tsipras chose to prioritize continued membership of the eurozone over doing away with austerity. The choice was controversial and left many people feeling betrayed.
Under pressure from creditors to strengthen the banking system, the Syriza-led government reluctantly agreed last year to allow auctions of properties seized from homeowners and small businesses who foreclose on their loans — the same people Tsipras had promised to protect as opposition leader.
But the government’s attempts to recover the approximately €108 billion of non-performing loans which make up 50 percent of all Greece’s bank portfolios have hit stiff opposition from a growing protest movement that has prevented all but a few hundred of the thousands of planned auctions from taking place. So the stock of “non-performing” loans continues to go up, talk of “Grexit” that has dogged the eurozone for seven years refuses to go away, and the prime minister’s popularity is going down — including among the protest movements that brought him to power in the first place.
Activists from the “Against the Auctions” movement gather in law courts across the country every Wednesday at 3:30 p.m. to physically prevent the foreclosure auctions from taking place. A fortnight ago, as usual, around 50 of them marched from courtroom to courtroom in Thessaloniki, Greece’s second city, and up to the judge’s bench, demanding to know what auctions were taking place.
After a hasty assembly in the hallway, they rushed for one courtroom in which the foreclosure of a 108-square-meter shop was taking place. Owned jointly by a father and daughter, it was being auctioned by Piraeus Bank.
“There is rage, anger. There are many folks that believed in Syriza, but their hope is gone for good” — Schoolteacher Ilias Smilios
Ilias Smilios, an unassuming middle-aged school teacher, led the group towards the presiding notary. “You are implementing a theft,” he shouted. “The auction is cancelled because we are here. We are not letting it happen.”
“There is rage, anger,” Smilios told POLITICO in a café opposite the Thessaloniki courthouse, after successfully halting the auction. “There are many folks that believed in Syriza, but their hope is gone for good.”
‘It will become law’
Ironically, the anti-foreclosure movement’s slogan — “Not a single house in the hands of a banker” — was one which Tsipras uttered himself back in January 2015, during a speech to jubilant supporters of Syriza two days before its election victory on a radical anti-austerity platform.
“We have a plan, and we commit to put an end to this nightmare of auctions of primary residences. Not a single house in the hands of a banker!” Tsipras told the cheering crowd. “Today it is a chant, from Monday it will become a law of the state.”
The bitter irony of the current situation is not lost on his party. Last year, Syriza’s own newspaper published an open letter to Tsipras and Justice Minister Stavros Kontonis from an anonymous Thessaloniki debtor, identified as Michalis P.
The letter was described in the paper as “the desperate cry of Michalis P., unemployed, diagnosed with a disability, a father of a large family and an autistic child [whose] only house in Thessaloniki is in danger of being lost in the auctions and as a result seven people will live on the street.” The case was a boon for the anti-auctions movement and on September 28 several hundred people blocked the auction of his home.
“From that point on, the movement changed throughout all Greece, and the movement became more decisive,” said Smilios, who can be seen in videos from that day, pumping his fists and leading the chants from a table top, as riot police struggle to regain control.
The government insists homes are safe. In a statement, the Ministry of Economy said current legislation meant “60 percent of primary residences of households in distress” have protection against foreclosure.
“We have set a specific operational target [to reduce non-performing loans] and so far all quarterly intermediate targets have been met,” said the ministry, while acknowledging that the level of bad loans is higher now than two years ago.
Syriza MPs and senior party members who were asked by POLITICO to comment on the foreclosures program either didn’t respond or declined to talk. The government’s press secretariat didn’t respond to repeated requests to provide comment for this story.
After the Greek government agreed at a meeting of eurozone finance ministers on February 20 to discuss further reforms of its tax and pension systems and the labor market, Finance Minister Euclid Tsakalotos was forced to deny rumors that the decision had led to tension within the ruling party. “There isn’t an ounce of truth in what is being said,” the Greek media quoted him as saying.
The government said it would legislate “countermeasures” to offset any financial harm encountered by ordinary Greeks as a result of such new measures. “For every euro that burdens [citizens], there will be a euro in relief,” government spokesman Dimitris Tzanakopoulos told reporters.
Notaries on strike
In response to the chaos in the courts, Greek notaries nationwide decided not to carry out foreclosures of any residential property. Interviewed at her office, the president of the Thessaloniki Notaries Association, Ioanna Bilisi-Chrousala, said the decision was taken to prevent “a big social problem” and widespread homelessness.
Before each Wednesday’s bout of auctions, notaries across Thessaloniki fax their foreclosure documents to Bilisi-Chrousala asking permission to go ahead. Giorgos Seretis, general secretary of the Notaries Association, showed POLITICO one such document, which he said was a request for permission from Bilisi-Chrousala to carry out a foreclosure on a business. “It is a business foreclosure, so this will be done,” he said.
But residential foreclosures for debts owed to banks and the Greek tax office, or between individuals if the property is the primary residence, are not being signed, he said. “If it is an industry or a warehouse it is allowed, if it is a residency it is not allowed.”
Bilisi-Chrousala says notaries are pushing the government to make good on its word and pass a law banning foreclosures of primary residence. However, the Against the Auctions movement doesn’t consider them to be its allies: Notaries are often on the receiving end of abuse in court, and Bilisi-Chrousala says she has been personally attacked by members of the movement.
“We protect the primary residences and we have declared that publicly,” said Bilisi-Chrousala. “We don’t agree with these protesters, they don’t know what they want. They don’t only block the foreclosures of primary residences, but they stop the whole civil procedures of the country.”
“The pressure from the banks is so much … that we have had to establish here psychological support groups for indebted consumers” — Economist Panagiotis Kalofonos
She said the focus should be on auctioning off high-value industrial properties to raise money for the tax office and to help banks recover loans. “This is the philosophy of the economy,” she said.
Successive governments have introduced laws for struggling debtors to register their primary residence for protection against foreclosure if it doesn’t exceed a certain threshold value. But Panagiotis Kalofonos, economist for the Union of Working Consumers of Greece, said the threshold had been progressively lowered. Now standing at €120,000, it protects fewer primary residences and tends to shield only working people and “not traders or merchants,” he said.
Kalofonos’ consumer association helps struggling debtors to apply for primary residence protection and provides legal advice. It now also offers psychological support as financial difficulties often lead to mental-health issues, alcoholism, suicide attempts, and divorce.
“The pressure from the banks is so much … that we have had to establish here psychological support groups for indebted consumers,” he said.
“[The debt collectors] can call you any time of the day or night until 8 or 9 o’clock, and they are not discreet at all,” he said. “It doesn’t matter what you tell them. You can tell them: ‘Look, I just lost my job, my mother died’ — true cases — and they will say OK and call you again three hours later.”