Greek Finance Ministry considers lifting ban on repossession of primary homes

Greek Finance Ministry considers lifting ban on repossession of primary homes

 

By Lefteris Yallouros – Athens

The Greek Finance Ministry’s plans to lift a ban on the repossession of primary homes are threatening to throw the Greek government into another political crisis.

The government is contemplating a plan to partially lift the ban from early 2014 and apply criteria that include the financial situation of homeowners, the size of the mortgage and the homeowner’s debt.

The ban on auctions of main residences valued up to EUR 200.000 was enforced in 2012 and expires at the end of 2013.

Ruling New Democracy MP’s have spoken out against the lifting of the ban and have already warned that such a measure will never be voted into law by Parliament.

Evangelos Venizelos, the leader of junior coalition partner PASOK, said in an interview Tuesday that “the ban could not be lifted and the homes of poor people could not be put in danger as this would be of good to nobody, not even the banks”.

Greece’s international lenders however have a different opinion, as it has been reported that the troika will push for the ban to be lifted when talks on the country’s progress in its adjustment program resume in September.

Banks on the other hand, who have a large amount of bad loans in their portfolios, maintain that they do not intend to become property managers. Managing nonperforming loans is part of the restructuring strategies banks have been planning for the immediate future and with the rate of creation of new bad loans having slowed, dealing with troubled lenders is placed in a greater context by bank managers.

The problem for the government, however, is that the debate on whether or not the ban should be lifted started early and deputies have started to express their objections early on. This is seen as a warning to the government that is should toughen its stance in upcoming talks with the troika and make sure homeowners – already hit hard by the debt crisis and rising unemployment – are protected from losing their primary residences.