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  • Government fails to reach agreement with creditors on home foreclosure protection

    The talks will continue at a meeting of the Euro Working Group on 25 March, which will lay the groundwork for decisions to be taken at the next Eurogroup meeting, on 5 April.

    Greek finance ministry officials and representatives of the country’s creditors in a teleconference today failed to reach agreement on the framework for protection from foreclosure of debtors’ primary residences.

    The Greek side was represented by Finance Minister Euclid Tsakalotos, Alternate Finance Minister Yorgos Houliarakis, Minister to the Prime Minister Dimitris Liakos, and the government’s general secretary for coordination, Dimitris Papagiannakos.

    The talks will continue at a meeting of the Euro Working Group on 25 March, which will lay the groundwork for decisions to be taken at the next Eurogroup meeting, on 5 April.

    For the government to receive a 970mn euro tranche from the profits of eurozone central banks on Greek bonds, it will have to radically overhaul its initial plan, which was viewed by creditors as exceedingly generous and unfeasible.

    The changes and stricter terms demanded by creditors are as follows:

    • The ceiling of the remaining unpaid portion of the loan will be 100,000 euros, whereas the government and Greek banks had agreed to a 130,000-euro ceiling on the remaining debt.
    • The ceiling of the tax valuation of the protected primary residence will be 230,000 euros for a five-member family, and not 250,000 as proposed by the Greek side.
    • The total value of the debtor’s assets will have to be considerably lower than proposed by Athens. Moreover, the protected debtor must not have bank deposits above 20,000 euros, whereas the government had proposed a 65,000-euro ceiling on bank deposits. The ceiling on the value of debtor’s additional properties (aside from the primary residence) will be 25,000 euros (tax bureau valuation), whereas the Greek government had proposed a 260,000-euro ceiling.

    According to data provided by Greek banks, the unpaid portion of about 70 percent of home loans for the purchase of a primary residence is less than 100,000 euros, whereas the unpaid portion of 85 percent of non-performing loans is on average 150,000 euros.

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