Greece considers mortgage aid

The government is examining offering low-income mortgage holders the opportunity to defer payments as a means of helping to ease the pain of the financial crisis on selective social groups, said National Economy and Finance Minister Giorgos Alogoskoufis yesterday. Spain announced earlier this week that unemployed workers will be able to defer half of their monthly mortgage payments, with a limit of 500 euros for up to two years. The Spanish government will act as a guarantor for the delayed payments. Alogoskoufis said that Greece will look at what exceptions can be made for specific mortgage holders, such as the unemployed, but ruled out a general deferment being offered to those with home loans. «You understand that this (a general deferment) would lead to the collapse of the credit system, a credit system that today needs capital,» he told reporters. In a bid to help provide banks with liquidity and capital, the conservative government has proposed a 28-billion-euro bank rescue plan that has been submitted to Parliament. A number of lenders, however, have said they will not take part in the bank rescue plan, saying that they do not need the conditional funding on offer. Banks that take part in the plan are required to hand over some control of management to the state and impose a salary cap on its top executives. Alogoskoufis said yesterday he believes all Greek lenders will take part in the plan, in order to provide themselves with a safety net. Final changes are expected to be introduced to the draft bill today for the program that banks have until February to decide whether they will take part in. October inflation seen as retreating Greece’s consumer inflation is likely to have decelerated to below 4 percent in October, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. «As they have informed me from the statistics service, it is possible that last month’s inflation dipped to below 4 percent for the first time in many months. This is very important, as it shows it is starting to retreat,» he said. Consumer inflation in Greece eased to 4.6 percent year-on-year in September, from 4.7 percent in August, due to softer fuel and supermarket prices. October inflation data are scheduled to be released on Monday.