Mortgages: Support strictly for the few – The ‘Spanish model’ cannot be applied

By Chrysostomos Tsoufis

The Spanish model cannot be applied in Greece (it would lead to an increase in provisions as has written) the banks explained to Christos Staikouras in the second meeting they had. Instead, and according to banking sources, they proposed a plan similar to the GEFYRA program, which provides for subsidizing housing installments with pre-note A residence and according to strict income and asset criteria so that the final number of beneficiaries does not exceed 25-30,000 housing loans .

The income and property criteria they will resemble those used for 2nd chance debt settlements under the out-of-court mechanism.

That is: up to €7,000 for a one-person household increased by €3,500 for each member. The total income cannot exceed €21,000 regardless of the composition of the household.

For the property criteria, the total property cannot exceed €120,000 for a one-person household increased by €15,000 for each member up to the amount of €180,000.

Given that there are no budgetary margins, the banks will assume any cost of the program on the CONDITION THAT THEY RECEIVE THE GREEN LIGHT FROM THE ECB. In the following days, the banks will bring the plan to Frankfurt’s attention and if it is accepted, they will officially present their proposal to the Ministry of Finance in 2 weeks, which calls for attention because otherwise there is a risk of even losing the prospect of investment grade.

According to an announcement by the Ministry of Finance, it was also agreed to speed up the arrangements of the out-of-court mechanism. There is already an improvement as 200 new settings were made in the last 10 days alone. It was also agreed to reduce the interest rates of these arrangements as well as the universal approval of the arrangements concerning Swiss franc borrowers.

In addition Christos Staikouras asked the banks:

– To increase deposit rates, according to information by 0.50%. The first ones have already been made, but they are very small.
– To reduce interest rates on new loans
-To submit proposals to improve the extrajudicial mechanism in order to increase the approvability of applications
-Reduce the fees they charge. A specific list of commissions was given by the Ministry which the banks will evaluate individually.

In addition, Mr. Staikouras made it clear to the representatives of the banks that for the government there is no question of paying a bonus this year without the finance minister being able to impose it on them.

The latter is indicative of the bad climate in which the meeting was held, a bad climate which both sides confirm. An official of the ministry, present at the meeting, commented that “the discussion was shocking. We heard the exact opposite of what we were saying last week.”

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