No deal yet on debtor protection


The meeting between bank managers and government officials chaired by Prime Minister Alexis Tsipras at his office on Monday evening regarding the plan to provide protection for debtors’ main residence ended inconclusively.

Although progress was made in reducing the distance between the two sides, it was clear there is still a long way to go before they reach a compromise, which will likely be very different to the blueprint sent to Greece’s creditors.

Sources said that although the government has distanced itself from its original maximalist positions, it is still seeking to expand protection limits to more debtors. Government sources said Tsipras tried to get the four systemic banks to agree to a maximum limit on the value of protected homes of 150,000 euros, but the lenders consider this to be too high.

A key parameter for the success of the new system will be the operation of an online platform the Special Secretariat for Private Debt Management will create. Banks view the platform’s operation as vital because it will allow for the provisional screening of applications to establish in advance whether applicants meet the criteria.

The platform will be connected both to banks and the tax administration, and will feature not only each applicant’s debts but also the entire set of data on their income and property, as the debt settlement or the protection of the primary residence will require the lifting of banking secrecy.

The aim is to grant individuals, through the online platform, the capacity to reach an arrangement for their debts using standardized solutions that may also include a debt haircut.

Meanwhile in Brussels Greece’s creditors reacted negatively to the blueprint for the replacement of the Katseli law, asking for changes to the draft that they were presented with. “If there are no changes to the draft, there can be no positive recommendation by the creditors,” sources said on Monday. European Stability Mechanism chief Klaus Regling stressed after Monday’s Eurogroup meeting that Greece has “a few more weeks” to complete all its pending actions.