ECONOMY

Plan for clearing business NPLs tabled, mortgages to follow

Outgoing Development Minister Nikos Dendias submitted to Parliament on Monday a plan for dealing with some 40 billion euros in non-performing loans (NPLs) held by businesses.

Dendias, who was set to take over as defense minister later on Monday, said that the ministry is also working on a scheme for unpaid mortgages, which total 27 billion euros.

The plan for forms foresees the writing down of up to 50 percent of the amount they eye, with a ceiling of 500,000 euros in place for each lender they do business with. There are a range of criteria a business must meet so it can qualify.

As for mortgages, the government’s plan is reportedly based on banks reducing the recorded value of the property against which the mortgage has been taken by 30 percent. The loan will then be split in two.

One part will be repaid normally, while there will be a 10 to 15-year moratorium on the remainder. The value of the property will be recalculated when the second part of the mortgage becomes due.