Greek Prime Minister Antonis Samaras’ plan to let banks seize homes if people can’t afford to pay their mortgages because of unrelenting austerity measures has run into resistance even from Members of Parliament in his New Democracy Conservative party and the coalition partners, the PASOK Socialists, but the government said they will be spoken to and persuaded to back it.
Under pressure from its international lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB), the government wants to lift a ban that expires at the end of the year and which has prevented banks, which are receiving 50 billion euros ($65 billion) in bailout money from the government, to take the homes of people who have fallen behind on their mortgages.
Nearly 23 percent of mortgage holders aren’t paying and the government said it wants banks to sort out legitimate cases where they can’t afford the monthly cost from people it believes are taking advantage of austerity to avoid paying, but there were no plans announced to protect people who will otherwise lose their homes, even primary residences. Bad loans in mortgages total 16.8 billion euros ($22.28 billion).
All that comes as the government is set to increase property taxes again to go along with three years of pay cuts, other tax hikes, slashed pensions and the coming firing of scores of thousands of public workers, setting off uneasiness from a handful of New Democracy and PASOK MP’s.
The government has admitted it’s moving ahead to let home auctions begin in January but said it would seek to protect homeowners who are suffering genuine economic hardship, although Samaras earlier set aside a bill to provide relief to debtors. The government didn’t offer a plan to require banks to restructure mortgages to a level where people could pay, even if they could demonstrate they can’t meet their current obligatons because of pay cuts, tax hikes, slashed pensions or job loss.
New Democracy’s Parliamentary spokesman Sofia Voultepsi launched a strong attack against any plans to lift the temporary ban, which applies to homes worth less than 200,000 euros. “This law already aims to protect the weak; if there are people hiding behind it then we have to find them,” she said, attributing the pressure on the Greek government to “obsessions” within the troika.
“The Troika argues that if auctions do not resume, the property market will collapse, like it did in the United States in 2008,” she said. “It is better for the property market to collapse first and for there to be a civil war afterward, rather than for there to be a civil war first, in which case the property market will collapse anyway, as will banks, the government and all of us.”
PASOK MP Dimitris Karydis said ministers who support the foreclosures were “irresponsible and badly prepared.” Several lawmakers from the Socialist party, including Odysseas Konstantinopoulos and Theodora Tzakri have also expressed opposition. There was no word on whether any politicians are in danger of losing their homes.
In most circumstances, Samaras and PASOK leader Evangelos Venizelos could eject from their parties lawmakers who don’t follow their orders on how to vote but the coalition has only 155 of the 300 seats in Parliament and needs every vote it can get. Previous signs of rebellion over austerity have almost always resulted in coalition MP’s coming on board.