Obstacles remain in lender talks

Obstacles remain in lender talks

The prospects of Greece and its lenders settling a set of outstanding issues ahead of a planned Euro Working Group (EWG) on Monday remained in the balance after another round of talks Friday.

Kathimerini understands that the two sides have yet to resolve their differences on key issues such as the settlement of nonperforming loans (NPLs) and foreclosures of primary residences.

The Greek side remains hopeful that an agreement can be reached over the weekend so that the EWG can pave the way for Athens to receive the next 2-billion-euro installment of its third bailout and the 10 billion euros set aside for the recapitalization of local banks.

During a press briefing in Brussels Friday, European Commission spokeswoman Mina Andreeva said there had been “progress” during the talks in Athens.

Athens appears to have softened its position on the sale of NPLs to investment funds but only if they are affiliated to banks or international organizations. Also, the Greek government wants the Bank of Greece to issue licenses to any bodies that purchase loan portfolios and to be responsible for monitoring the process.

The coalition, however, wants mortgages and loans to small and medium-sized businesses to be excluded from the transactions.

On home repossessions, Athens still wants primary residences with a taxable value under 180,000 euros to be protected if the homeowner is single. The value would rise if the home is owned by a couple or if they have children, reaching a high as 305,000 euros for a five-member family.

These criteria would prevent 56 percent of homes from being repossessed, Greek officials estimate. However, the institutions believe that this is too high. As a result, the government may lower its starting value from 180,000 to 150,000.

Meanwhile, the government appears intent on increasing social security contributions so it can minimize the cuts it has to make to pensions. The draft plan the Labor Ministry is working on is to increase employers’ contributions by 1.5 percentage points and by up to 1 percent for employees. This will help raise around 600 million euros per year.

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