Abulico
Forumer storico
Time running out for coalition to find formula on home foreclosures
Prime Minister Antonis Samaras received timely words of encouragement from European Commission President Jose Manuel Barroso on Wednesday but his government still finds itself in a tricky position ahead of the troika's return to Athens later this month, when a final decision will have to be taken on home foreclosures.
Samaras returns to Athens for a vote on the 2014 budget on Saturday night and another on the unified property tax next week but it is the foreclosures issue that is likely to nag away at him for the next few days. It is one of several loose ends Greece has to tie up but may prove the most tricky.
Since 2008 Greek banks have been prevented from foreclosing on homes with a taxable value of less than 200,000 euros. The temporary measure was introduced to protect households from any spillover effect when the financial crisis broke out in the US. But the ban has been renewed each year.
It is due to expire at the end of December and the troika wants Athens to lift the moratorium. Greece's lenders say they are not asking for a complete removal of the ban but want it to be replaced with a framework that does not allow those who are able to pay but "systematically abuse" the system to get away with it. The failure of Greece's tax system to keep up with rising house prices ahead of the crisis meant that homes with a taxable value of less than 200,000 euros included properties with a much higher market price as well as more modest abodes.
For the government, though, home foreclosures have become a taboo. It has failed to steer the debate - either on a broader public level or within coalition ranks – away from fears that a failure to renew the moratorium would also lead to those genuinely unable to pay their mortgages losing their homes. It would certainly be highly damaging for the coalition if a change to the current status quo led to people being thrown out of their homes in the middle of winter. This would undermine most governments, let alone one with just a four-seat majority in Parliament.
The opposition parties have sensed that they can tighten the noose on this issue and have mostly come out strongly in favour of renewing the foreclosure ban. On Wednesday, SYRIZA leader Alexis Tsipras said the coalition should set this as a "red line" in its negotiations with the troika. "If the government isn't prepared to do so then society will have to," said Tsipras, hinting that this could be an issue around which to organise a mass protest.
Independent Greeks leader Panos Kammenos labelled any failure to renew the moratorium as "unethical and unconstitutional."
Former coalition partner Democratic Left has been a little more conciliatory on the matter, arguing for the ban to be renewed for another year but allowing room for adjustments that would allow banks to pursue wealthy Greeks who have been taking advantage of the restrictions.
This option probably offers the government the best way out of the current bind. An adjustment to the current state of play that would be clearly aimed at targetting unscrupulous homeowners is likely to be the only way the coalition could get enough parliamentary support for new legislation. Time to strike such a formula, however, is limited. The troika has so far appeared adamant that the current arrangements have to change and the moratorium runs out at the end of this month. A failure to agree on something to replace it would allow lenders to begin foreclosures in January.
Prime Minister Antonis Samaras received timely words of encouragement from European Commission President Jose Manuel Barroso on Wednesday but his government still finds itself in a tricky position ahead of the troika's return to Athens later this month, when a final decision will have to be taken on home foreclosures.
Samaras returns to Athens for a vote on the 2014 budget on Saturday night and another on the unified property tax next week but it is the foreclosures issue that is likely to nag away at him for the next few days. It is one of several loose ends Greece has to tie up but may prove the most tricky.
Since 2008 Greek banks have been prevented from foreclosing on homes with a taxable value of less than 200,000 euros. The temporary measure was introduced to protect households from any spillover effect when the financial crisis broke out in the US. But the ban has been renewed each year.
It is due to expire at the end of December and the troika wants Athens to lift the moratorium. Greece's lenders say they are not asking for a complete removal of the ban but want it to be replaced with a framework that does not allow those who are able to pay but "systematically abuse" the system to get away with it. The failure of Greece's tax system to keep up with rising house prices ahead of the crisis meant that homes with a taxable value of less than 200,000 euros included properties with a much higher market price as well as more modest abodes.
For the government, though, home foreclosures have become a taboo. It has failed to steer the debate - either on a broader public level or within coalition ranks – away from fears that a failure to renew the moratorium would also lead to those genuinely unable to pay their mortgages losing their homes. It would certainly be highly damaging for the coalition if a change to the current status quo led to people being thrown out of their homes in the middle of winter. This would undermine most governments, let alone one with just a four-seat majority in Parliament.
The opposition parties have sensed that they can tighten the noose on this issue and have mostly come out strongly in favour of renewing the foreclosure ban. On Wednesday, SYRIZA leader Alexis Tsipras said the coalition should set this as a "red line" in its negotiations with the troika. "If the government isn't prepared to do so then society will have to," said Tsipras, hinting that this could be an issue around which to organise a mass protest.
Independent Greeks leader Panos Kammenos labelled any failure to renew the moratorium as "unethical and unconstitutional."
Former coalition partner Democratic Left has been a little more conciliatory on the matter, arguing for the ban to be renewed for another year but allowing room for adjustments that would allow banks to pursue wealthy Greeks who have been taking advantage of the restrictions.
This option probably offers the government the best way out of the current bind. An adjustment to the current state of play that would be clearly aimed at targetting unscrupulous homeowners is likely to be the only way the coalition could get enough parliamentary support for new legislation. Time to strike such a formula, however, is limited. The troika has so far appeared adamant that the current arrangements have to change and the moratorium runs out at the end of this month. A failure to agree on something to replace it would allow lenders to begin foreclosures in January.
