Greece wants political solution on bad debt dispute blocking review

People walk along the commercial Ermou street next to graffiti reading
People walk along the commercial Ermou street next to graffiti reading "Troika" in central Athens, Greece, October 20, 2015. REUTERS/Alkis Konstantinidis

November 9, 2015

ATHENS (Reuters) – Greece said on Monday it would take a political decision to overcome a dispute with international lenders over the treatment of non-performing loans at Greek banks, an issue it says threatens less well-off homeowners.

Athens insists resolving the issue should not result in thousands of poor Greeks at risk of losing their homes and says a deal may have to be taken by Europe’s leaders to bridge the dispute.

“The thorny issue is the distance that separates us on the issue of protecting primary residences,” Economy Minister George Stathakis told Real FM radio.

“I think the negotiations we conducted with the institutions has closed its cycle .. so its a political decision which must be taken,” he said.

The comments came ahead of a euro zone finance ministers’ meeting in Brussels which is to assess if Athens qualifies for more bailout funds.

Stathakis said that there was progress on most of the remaining issues holding up the review and that “a compromise will be reached” on the regulation of tax and pension fund arrears.

The country’s progress in meeting the terms of the bailout is due to be assessed at the Eurogroup later on Monday. An accord would have released 2 billion euros to Athens, part of an initial tranche of 26 billion under the bailout, worth in total up to 86 billion euros.

Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker discussed the bad-loans issue by telephone on Sunday. French President Francois Hollande and German Chancellor Angela Merkel also talked about it by phone.

“Greece is making considerable efforts. They are scrupulously respecting the July agreement,” French Finance Minister Michel Sapin told reporters. “I want an agreement to be reached today. France wants an agreement today.”

(Reporting by Renee Maltezou in Athens; Additional reporting Michel Rose in Paris; writing by Michele Kambas Editing by Jeremy Gaunt)