Greek Mortgage Ban Battle Set

ATHENS – Having passed a disputed and contentious 2014 budget that has a big hole in it, Greek lawmakers now will take up the tougher test for the government over whether to lift a moratorium against foreclosures when it expires on Dec. 31 as demanded by its international lenders who want to let banks confiscate homes of mortgages in default.

The target is primary residences under 200,000 euros ($274,300) in value but the idea of putting more people on the streets in a crushing economic crisis has rattled even some lawmakers in the ruling coalition of Prime Minister Antonis Samaras’ New Democracy Conservatives and his partner, the PASOK Socialists, who instituted the bank two years ago when in power.

The government has only a four-vote majority in the 300-member Parliament and Samaras has reportedly been talking to his lawmakers while trying to bring PASOK leader Evangelos Venizelos, who serves as his Deputy Premier/Foreign Minister back in line to back lifting the moratorium as insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).

Venizelos, following a public outcry against lifting the ban, now has voiced some objections to it although he supported it earlier after previously opposing it. He and Samaras have said they want to make sure that people who legitimately can’t pay because of big pay cuts, tax hikes and slashed pensions imposed by the government on Troika orders are protected or exempted.

Samaras and his Finance Minister Yannis Stournaras said banks – which already been recapitalized with 50 billion euros ($68.5 billion) in bailout funds from the Troika need to seize homes for non-payment to help the banks further balance their sheets but that some protection should be offered.

The major opposition Coalition of the Radical Left (SYRIZA) party has put forth a motion to extend the ban for another year but political rivals of the government don’t have enough votes to extend it unless some New Democracy or PASOK lawmakers go against orders to support it, which could see them ejected from the party, further weakening the government.

Venizelos earlier said only a small percentage of people were exploiting the ban but if only 15 percent of homeowners are targeted, and the ban is continued, the government didn’t say how that will help the banks sufficiently.

According to bank estimates reported in Kathimerini for mortgages more than 90 days in arrears, most of the 15,000 who aren’t paying but can have mortgages of up to 500,000 euros ($685,000) and live in luxury homes but have stopped paying what the owe because the banks can’t touch them for now.

The ban has its loopholes too though. Greek courts have reportedly rejected about 8,000 claims for protection under the so-called Katseli Law, out of a total of 80,000 after judges found that those applicants had tried to hide part of their assets.

According to data from the Bank of Greece, non-performing loans in the country increased sevenfold between the start of 2008 and the end of 2012 and have reached almost 42 percent, including credit cards, loans and mortgages.

Lifting the moratorium has been an obstacle in ongoing negotiations between the government and the Troika. The IMF’s man in Athens, Poul Thomsen, reportedly told the government to start preparing ways to house the new wave of homeless if it is.