Gov’t and banks at odds on debtor protection plan details
The issue between the government and the banks regarding the compulsory inclusion of debtors with pending court cases in the new platform for primary residence protection remains open.
The number of outstanding applications stood at 135,000 at end-December, and the submission of applications has continued in the first couple of months of this year.
The government argues that inclusion in the platform should be a parallel right of debtors, without the court process canceling the platform that is meant to replace the protection provided by the Katseli law.
That position is vehemently opposed by banks, which consider the Katseli law to have been abused by a considerable number of strategic defaulters – an estimated 20 percent of applicants – and say that compulsory inclusion in the platform would make them easy to identify and exclude from the protection status.
In the banks’ view, the provisional screening of those cases ought to be conducted using the old criteria of the law named after former economy minister Louka Katseli, while definitely leading to their exclusion from protection.
The Finance Ministry counters that those who may appear to fail one or more criteria but have already received a date for their application’s court hearing should not be subject to loss of protection, as the banks would prefer.
The issue, which appears to have a legal dimension, is a key matter in the banks’ opinion, as lenders believe an efficient formula must be found to clear out the outstanding Katseli law cases.
Despite the major disagreement between the government and the credit sector on the matter, the ministry has sent its draft law to the country’s creditors. Kathimerini understands that the creditors have expressed reservations on the maximum value of the primary residence that will be protected and according to the criteria agreed last week reaches up to 250,000 euros.
The clock is ticking though as the protection of the Katseli law expires at end-February and even if all sides reach an agreement, it will be hard to get the online platform up and running in time.
