Creditors' objections still holding up new framework for protection of primary residences

Friday, 15 March 2019 15:20
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European creditors, especially the European Central Bank (ECB), have reportedly tabled four main objections to the proposed framework presented by the Greek government for protection of primary residences in the country from creditors.

The objections remain and are obstacles in negotiations between Athens and creditors, even as Greece's four systemic banks have mostly agreed with the government over a successor law to replace the previous "Katselis Law".

Chief among European creditors' objections is the poll-trailing Tsipras government's intent to include non-performing business loans linked with a primary residence as a guarantee. Most of such NPLs are considered small, in value, taken out by SME owners or self-employed professionals. At the same time, creditors have accepted objections aired by the Bank of Greece (BoG) regarding loans extended by cooperative banks.

This category of NPLs reaches only two billion euros.

A second objection relates to the maximum value allotted to a primary residence under protection, with the government initially pointing to a 250,000-euro ceiling for a property's objective value, and 130,000 euros remainder on an outstanding loan.

Other objections deal with the number and value of assets held by eligible applicants, and finally, whether new NPLs emerging in 2019 will be eligible.

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