With a rebellion growing in their ranks over plans to let banks seize homes after a ban on foreclosures expires at the end of the year, Greek Prime Minister and New Democracy Conservative leader Antonis Samaras and his coalition partner, Deputy Prime Minister/Foreign Minister/PASOK Socialist leader Evangelos Venizelos said after meeting together that the poor and people who can prove they can’t pay in the wake of austerity measures will be exempted.
They didn’t say how it would be determined who could pay but isn’t from those who genuinely can’t and what kind or review system would be established or what the criteria would be.
Greece’s international lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and the banks are squeezing the government to let them confiscate homes even though they are getting 50 billion euros ($65 billion) in recapitalization funds and many aren’t allowing indebted homeowners to restructure their loans.
Ironically, New Democracy and PASOK owe the country’s banks 250 million euros ($333.16 million) in bad loans, aren’t paying and aren’t being pursued while they are in charge of injecting the banks who are their creditors with money to keep them solvent.
“The primary residences of socially weak citizens and whoever is demonstrably unable to meet loan payments due to the crisis will be absolutely protected. That is not subject to negotiation. Period,” Samaras said, hinting that some people are hiding behind the country’s economic crisis and can afford to pay but aren’t, although pay cuts, tax hikes, slashed pensions and a record unemployment rate of 27.4 percent have created a 42 percent default rate on loans across-the-board, including consumer loans and credit cards.
The premier added that the government was studying a framework of reforms that would protectthe vulnerable but would also prohibit abusive behavior and seek to protect mortgage credit.
He didn’t say why the government earlier had set aside a bill he promised to push that would allow indebted households to restructure their loans so they could afford to pay what they owe.
Leaving the Maximos Mansion, Venizelos was asked by reporters whether an agreement had been reached on the issue of foreclosures. “I think so, yes,” the deputy premier said.
The PASOK chief suggested that the ban would be partially lifted with the onus being on homeowners who have the ability to pay their loan payments but are not doing so while low-income Greeks genuinely unable to pay would be protected. He didn’t elaborate on how that would be determined or what the mechanism would be.
“I have said repeatedly that the primary home of the poor and middle-level household, which is suffering due to the crisis, is and will remain absolutely protected,” Venizelos said.
He referred to a small minority of “crafty individuals” hiding behind those who are genuinely in need, adding that the chief issue is not that of foreclosures but of restoring the ability of banks to offer mortgage credit. He didn’t explain how the banks would benefit sufficiently if only a small minority of mortgagees couldn’t pay.
Venizelos added that several other issues were discussed during the meeting, which was also attended by Finance Minister Yannis Stournaras and Development Minister Costis Hatzidakis.