By T. Tsiros
[email protected]
A proposal by the Hellenic Financial Stability Fund (HSF) to offer state guarantees as part of an overall package of measures aimed to reduce considerable “bad debt” held by Greece’s four systemic banks was presented to creditors’ auditors in Athens on Tuesday by Finance Minister Euclid Tsakalotos.
The Greek side, according to reports, said more details will be added to the draft proposal before it is presented to the Commission.
Additionally, Greek officials told creditors’ representatives that the finance ministry has established a special working group, jointly with the Bank of Greece (BoG), to also process a separate proposal by the central bank on reducing “bad debt” held by the banks.
Government sources after the Tuesday evening meeting with creditors representatives said the HSF proposal was judged as the most “mature”.
Just as importantly, the Greek side on Tuesday presented the one-time “Troika” with the outline of a new framework to protect primary residences from creditors, primarily mortgage-holding banks, with the latter requesting more details. Creditors’ auditors also requested information on legal challenges by retirees and civil servants demanding retroactive payment of previous pension and pay cuts – as well as the fiscal consequences should such legal challenges lead to court rulings in their favor.
