ATHENS – At the same time the country’s ruling parties aren’t paying their bank loans, the government has refuted reports it wants to let banks go after debtors who can’t pay because of a crushing economic crisis and harsh austerity measures.
The Ministry of Development and Competitiveness said it doesn’t plan to toughen up existing legislation commonly referred to as the Katseli Law which offers protection to households overburdened by debt.
It is named for former Minister Louka Katseli, also a former spokesman for the PASOK Socialists, who are now partners in the coalition government led by Prime Minister Antonis Samaras’ New Democracy Conservatives.
If the law is diluted, PASOK Socialist leader Evangelos Venizelos, who was named Deputy Premier/Foreign Minister after supporting the firing of public workers, will again oppose a law his party passed in a previous administration. He agreed to a lifting of a ban on mortgage foreclosures demanded by international lenders, reversing a law PASOK had put in place.
A list of suggested revisions to the law include increasing minimum monthly loan installments from 10 percent of the original monthly amount to 25 percent.
Another proposed revision entails repayment of the entire value of the property – based on the tax department’s so-called objective values – instead of the 80 percent provided for by the law, if debt holders wish to protect their primary residence from liquidation procedures.
This revision would increase the payments of debt holders to banks and has been proposed in a bid to stop certain debtors from exploiting the favorable terms offered by the law.
There was no word whether any prospective changes for tougher terms would apply to the ruling coalition parties, who owe banks 250 million euros in bad loans and aren’t paying.
The proposed revisions also include allowing small-scale traders to qualify for protection from excessive debt.
The ministry’s finalized draft bill on new regulations concerning nonperforming loans, which the government is working on in association with commercial banks, is expected to be tabled in Parliament next month.
Samaras has also reneged on a promise to forward a measure to help Greek households crushed by debt and unable to pay because he imposed big pay cuts, tax hikes and slashed pensions to benefit bankers and international lenders, creating record unemployment and deep poverty.