Greece’s ruling Radical Left SYRIZA wants to go ahead with a plan to protect some primary homes from foreclosures but is being squeezed by the country’s creditors to make the criteria stricter or face further withholding of a one-billion euro return of profits that banks made on Greek bonds.
Trailing far behind in polls in an election year, and having already reneged on his vow, “Not one home in the hands of banks,” in allowing previous foreclosures – now electronically to avoid sometimes violent protests at auctions – Prime Minister Alexis Tsipras wants to safeguard most primary homes from being seized by banks.
But the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) that put up 86 billion euros in a third bailout in the summer of 2015, wants most homes to be on the chopping block to protect banks.
That has led to a stalemate in the negotiations, said the news agency Reuters, which said the government is planning to submit a bill to Parliament on March 22 that puts most of the homes under an umbrella, which the Troika doesn’t want.
To conclude a second review after the Aug. 20, 2018 end of three bailouts of 326 billion euros, Greece must get the approval from the Troika before instituting changes to strict laws that had granted even greater protections to homeowners.
The standoff is expected to be discussed at a meeting of Eurozone deputy finance ministers on March 25, Greek Independence Day, and a holiday in the country. A Troika official who wasn’t identified told the news agency there was confidence there could be a resolution before another finance chiefs meeting of the bloc on April 5.
The obstacles now are said to be what the ceiling would be on the value or mortgage of homes to be protected from confiscation, income criteria and small corporate loans with a banker who wasn’t named telling Reuters the government wanted to include a total of 11 billion euros in bad loans but the Troika wants it to be no more than 7 billion euros.
Bad loans account for about 45 percent of banks’ portfolio and they have been holding back lending while hounding debtors who can’t pay because of harsh austerity measures continued by Tsipras who said he would halt them.
The government had pledged to cut the amount of bad loans by more than a third by the end of 2019 and there was even talk of another injection of state capital for banks that have already received more than 50 billion euros from the rescue packages with many bad loans going to businesses that wouldn’t pay.