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Troika Softens On Foreclosure Ban Lifting

bank ownedAfter insisting that banks be allowed to confiscate the homes of people who weren’t paying their mortgages during a crushing economic crisis Greece’s international lenders have changed their stance and now say the government should sort out those who legitimately can’t pay from those exploiting a ban on foreclosures.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) now wants Greece to prevent people “systematically abusing” the protection it offers, Simon O’Connor, the spokesman for European Economic and Monetary Affairs spokesman Olli Rehn said on Dec. 2, adding that the government should find alternative housing for people put on the streets.
O’Connor responded to journalists’ questions in Brussels by saying that the current ban on banks repossessing homes with a value of less than 200,000 euros if customers have stopped paying their mortgages also protected those who had the ability to pay but just stopped doing so.
“We want a solution that will protect the truly vulnerable but will also allow banks to put things order,” said O’Connor. “The general moratorium on foreclosures allows for systematic abuse from people who are trying to get away without paying.”
The foreclosure moratorium has been one of the big stumbling blocks preventing Greece and the Troika from reaching a deal on delayed reforms before release of a pending one billion euro ($1.37 billion) installment is okayed.
After Finance Minister Yannis Stournaras had vigorously backed the Troika and going after people’s homes even if big pay cuts, tax hikes and slashed pensions imposed by the government had put them in a position where they couldn’t pay, Prime Minister Antonis Samaras, the New Democracy Conservative leader and his coalition partner, Deputy PM Evangelos Venizelos, the PASOK Socialist leader backed off.
That happened when a number of lawmakers from the ruling parties who had voted for every austerity measure said that seizing people’s homes because the government had cut their pay and raised their taxes was too much for the lawmakers to stomach. If they voted against it, the government, which enjoys only a four-seat majority in the 300-member Parliament could have been jeopardized.
That led Venizelos, who as finance minister in a previous government doubled property taxes, to call Rehn and German Finance Minister Wolfgang Schaeuble to tell him that since the government backing off that the lenders should as well.
Reports in the Greek media hinted the IMF’s envoy in Athens, Poul Thomsen, who stays in 5-Star hotels while in Athens, had warned the Greek government to prepare accommodation for people who lose their homes rather trying to resist efforts to remove, or change the terms of, the foreclosure ban.
These reports were not confirmed or denied by the Troika but O’Connor said that the Greek banking system was not in a position to allow some homeowners to continue avoiding mortgage repayments.
“The protection of the socially vulnerable is the role of the state, not the banking system,” he said in Brussels. He didn’t say why it was the province of the government to give money to private banks as they have received 50 billion euros ($67.4 billion) in recapitalization funds.
 


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