ATHENS – Greece’s coalition government plans to lift a complete ban on foreclosures when it expires on Dec. 31 but officials said it would be extended for one year for primary residences valued up to 200,000 euros ($275,000) and for households with an annual net income under 35,000 euros ($47,825) while banks will be free to chase those without that protection.
The Parliament is to vote on the proposal on Dec. 21 but the measure is expected to pass as Prime Minister Antonis Samaras’ New Democracy Conservatives and his partner, the PASOK Socialists – who put the moratorium in place two years ago to protect households crushed by big pay cuts, tax hikes and slashed pensions that were demanded by international lenders – have a four-vote majority.
PASOK leader Evangelos Venizelos, who was made Deputy Premier/Foreign Minister after withdrawing his opposition to the firing of all 2,653 workers at the national broadcaster ERT that Samaras shut down, has now reportedly also given in on lifting the ban, driving worries that the party, already floundering at about 5 percent in the polls, could take another blow.
Some New Democracy MPs were also said to be anxious about even a partial lifting, fearing it would hurt the party as the major opposition party Coalition of the Radical Left (SYRIZA) has taken the lead in a new poll and is capitalizing on the austerity measures.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) had wanted the ban lifted completely to help banks but later eased up a bit and said it would accept some special conditions to protect the most vulnerable. The lenders, however, haven’t signed off on the new plan which is among a number of unresolved issues with the government.
Development Minister Costis Hatzidakis defended the proposal. “It is understood that this is a fair, balanced regulation which is being introduced without the clear agreement of the Troika but, I would like to believe, with (the Troika’s) understanding,” the conservative minister told Mega TV.
The government estimated that 85-90 percent of households would be protected for another year but didn’t explain how it will benefit banks to confiscate 10-15 of an estimated 230,000 mortgages in default.
SYRIZA said the plan was designed provide a loophole to sweep away the ban completely after one year to benefit banks. Samaras earlier had withdrawn a bill to provide debt relief to the hardest-hit households but wants the Troika to provide debt relief to the government so that it won’t have to fully repay its loans to the Troika.
New Democracy and PASOK also owe a combined 250 million euros ($341.7 million) to banks which it is not repaying. The loans were given without collateral and the bank officers who approved them were given immunity from prosecution.
The Democratic Left (DIMAR,) which briefly served in the coalition before leader Fotis Kouvelis withdrew after the ERT firings, and the Communist party also criticized the plan but even together they are irrelevant.
The Bank of Greece earlier this week said the general amount of non-performing loans had risen to 29.3 in June, from 24.5 percent a year earlier because many people just can’t pay their loans, credit cards and mortgages.