Talks on non­per­form­ing loans close to con­clu­sion

Cred­i­tors not happy with plan for a bad-bank al­ter­na­tive

Kathimerini English - - Front Page - DIM­I­TRA MANIFAVA

The gov­ern­ment ap­pears close to an agree­ment with its cred­i­tors on the is­sue of non­per­form­ing loans, as the rep­re­sen­ta­tives of the coun­try’s lenders are said to have ac­cepted the main points of the Econ­omy Min­istry’s pro­posal. How­ever, they still har­bor reser­va­tions re­gard­ing the cre­ation of an en­tity to man­age the bad loans, a sub­ject to be re­vis­ited af­ter banks have been re­cap­i­tal­ized.

A ma­jor stick­ing point in the talks is home re­pos­ses­sions as, ac­cord­ing to sources, Athens wishes to pass a law to sus­pend them even for the tran­si­tional pe­riod un­til a so­lu­tion to the prob­lem of house­hold overindebt­ed­ness is found, while the cred­i­tors ap­par­ently seem to want to re­tain the ban based on the in­for- mal un­der­stand­ing with the banks.

It is al­most cer­tain that in the next phase the ban on pri­mary res­i­dence auc­tions will only con­cern par­tic­u­larly vul­ner­a­ble so­cial groups in the form of a gen­eral safety net for them. The Euro­pean Cen­tral Bank had also sug­gested such a mea­sure in spring in re­sponse to the min­istry’s orig­i­nal bill on home auc­tions.

The main points of the min­istry’s pro­posal, as drafted by in­vest­ment bank No­mura, are the fol­low­ing:

The cre­ation of a Public Au­thor­ity for Sol­vency Ac­cred­i­ta­tion, which will as­sess and grade debtors based on their en­tire debts and their ser­vic­ing, not only to banks but also to so­cial se­cu­rity funds, the tax author­i­ties and util­i­ties.

Changes to the leg­is­la­tion on overindebted house­holds and cor­po­rate loans, with the cre­ation of courts ex­clu­sively for house­holds in trou­ble, the au­to­matic rejection of in­suf­fi­cient ap­pli­ca­tions and the align­ment of the 2014 law on busi­ness loans with the leg­is­la­tion on set­tle­ment of debts to the state.

The foun­da­tion of an as­set man­age­ment com­pany that will ef­fec­tively be an al­ter­na­tive form of a bad bank. This pro­posal has met with reser­va­tions from the cred­i­tors, but has not yet been re­jected.

The up­grad­ing of the Gov­ern­ment Coun­cil for Pri­vate Debt Man­age­ment, cre­at­ing a new in­for­ma­tion net­work for debtors.

It is al­most cer­tain that in the next phase the ban on pri­mary res­i­dence auc­tions will only con­cern par­tic­u­larly vul­ner­a­ble so­cial groups.

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