‘Red’ Loans Management to Unsettle Greek Parliament



241014105807_7707The hot issues of ‘red’ loans management and the privatization of the Independent Power Transmission Operator (ADMIE) will be tabled in Greek Parliament on Monday amid strong reactions from opposition parties.

Large business loans and second home mortgages will be transferred to distress funds, while small business loans, personal loans and first residence mortgages will go to legislation in two months.

However, debtors are protected for a few months since the status of distress funds that will manage or buy the bad loans have to be established within the Greek legislation framework.

Furthermore, there will be a 12-month period from the moment the banks will notify debtors that their loan would be sold to a distress fund, so they start repayments or make new arrangements.

However, there are certain issues raised such as the privacy of debtors as personal information would be given to distress funds. Also, it is not specified how the funds would operate within the Greek banking system, raising questions such as their legal rights or collection methods.

The second crucial issue is the privatization of ADMIE. The agreement between Greece and international creditors is that the operator will be separated from the Public Power Corporation (DEI) and the Greek State will own 51 percent of the shares.

The remaining 49 percent will be privatized and the management will be appointed after a joint decision between the Greek State and the European Commission.

The deadline for legislating the two reforms, along with other prior actions required by the bailout program, is Tuesday night.