Greek Prime Minister Alexis Tsipras told his cabinet on Tuesday to wrap up talks with lenders swiftly this week to get a new disbursement of international aid now held up in a dispute over home foreclosures and non-performing loans.
In the first major standoff with lenders since their being re-elected to office in September, Greek officials were told by eurozone finance ministers on Monday Athens would not get any more aid until it implemented a series of reforms, foremost among them being a tighter foreclosures law on problem mortgages.
Tsipras told cabinet it was a "priority" to conclude negotiations this week to allow the disbursement of 2 billion euros in aid, and another 10 billion to be released towards the recapitalization of Greece’s four systemic banks.
"He noted it was a priority to conclude negotiations this week, so as to facilitate approval … for the disbursement," a statement from his office said.
A European Central Bank stress test last month showed Greek banks needed a total of 14.4 billion euros in additional capital to survive a scenario of adverse economic conditions. Some of the amount is likely to come from private investors, using all or part of the 10 billion euros now held in account for that purpose.
Discussions have stumbled on the level of protection Greek mortgage holders should have if they fail to repay their debt.
Athens insists resolving the issue should not result in thousands of Greeks at risk of losing their homes. At present, mortgage holders can apply for foreclosure protection if the value of their home is 300,000 euros; the Greek government is now discussing protection based on a home valuation of between 180,000 and 200,000 euros, buffered by a series of income-based criteria.
A government source said that negotiations with lenders were continuing, and there appeared to be a level of convergence emerging. [Reuters]