Gov’t ta­bles re­form for tack­ling bad loans

Kathimerini English - - Front Page -

Out­go­ing De­vel­op­ment Min­is­ter Nikos Den­dias sub­mit­ted to Par­lia­ment yes­ter­day a plan for deal­ing with bil­lions of euros in non­per­form­ing loans (NPLs) held by Greek busi­nesses, a long-awaited re­form which still re­quires the ap­proval of the troika.

Den­dias, who as­sumed the post of de­fense min­is­ter later in the day, said the gov­ern­ment is also work­ing on a scheme for un­paid mort­gages, another ma­jor bur­den on banks and an in­tense so­cial prob­lem.

The plan for the com­pa­nies fore­sees the writ­ing down of up to 50 per­cent of debts owed, with a ceil­ing of 500,000 euros in place for each lender they do business with.

The re­form is aimed at light­en­ing the bur­den on tens of thou­sands of debtors that have an an­nual turnover of up to 2.5 mil­lion euros and em­ploy more than 700,000 peo­ple in to­tal. Den­dias said the prob­lem was se­ri­ous enough to war­rant a po­lit­i­cal con­sen­sus that stretched beyond the gov­ern­ment.

As re­gards the forth­com­ing mort­gage re­form, the gov­ern­ment’s plan is based on banks re­duc­ing the recorded value of the prop­erty against which the mort­gage has been taken by 30 per­cent. The loan will then be split in two: one part, amount­ing to 70 per­cent, will be re­paid nor­mally, while there will be a 15-year mora­to­rium on the re­main­ing 30 per­cent. The value of the prop­erty will be re­assessed when the sec­ond part of the mort­gage be­comes due.

The hope, Den­dias said, is that the prop­erty mar­ket will re­cover from a steep drop in prices in re­cent years.

Prom­i­nent left­ist SYRIZA MP Zoe Con­stan­topoulou re­jected the pro­posed re­forms as a “badly staged pub­lic re­la­tions ex­er­cise” by the gov­ern­ment, de­scrib­ing as an un­prece­dented vi­o­la­tion of par­lia­men­tary rules the fact that the min­is­ter who sub­mit­ted the bill will not be the one who sub­se­quently de­fends it in the House.

As re­gards the po­si­tion of the troika on the pro­posed plan for cor­po­rate NPLs, Den­dias said the two sides have al­ready reached a ver­bal agree­ment on the mat­ter but con­ceded that au­di­tors still had some reser­va­tions as re­gards the num­ber of in­stal­ments in which debtors should be al­lowed to honor their dues. He said the is­sue would be set­tled in the com­ing days. Costas Skrekas, who was sworn in yes­ter­day as de­vel­op­ment min­is­ter, will con­tinue talks with the troika on NPLs.

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