Louka Katseli

Representative of Greece's four systemic banks - Alpha, Eurobank, Piraeus, and National Bank of Greece - are holding their second meeting in a week this evening with the government's economic team at the PM's office.

The focus of the meeting will be a new law establishing the framework for the protection of debtors' primary homes from foreclosure.

One out of four mortgage debtors are under the protection of the Katseli law, according to the official data on pending applications at Greek courts that Kathimerini has seen.

The government is facing a difficult task in trying to overcome the resistance of banks on two key issues that would accelerate the reduction of nonperforming loans, which currently stand at some 80 billion euros.

The Katseli law, the minimum wage and privatizations will be the three main stumbling blocks in the talks between the government and its creditors that start on Monday in Athens in the context of the second post-program assessment.

The government and the country's systemic banks agreed on Friday to extend a legislation protecting primary residencies from auctions by two months, following a meeting of Prime Minister Alexis Tsipras with the Hellenic Bank Association (HBA) at Maximos Mansion.

The government is considering an extension to the protected status of overindebted borrowers' main residences (as provided through the so-called Katseli law) until a permanent protection framework is agreed with the country's creditors.

Finance Minister Euclid Tsakalotos said on Friday that although the protection of debtors' main residences will be abolished in January 2019 when the Katseli law ceases to apply, the government is seeking ways to ensure that debtors in need of protection are not left without a safety net and is aiming to present a solution soon.

Single Supervisory Mechanism (SSM) officials are increasing pressure on local banks to expand their auctions of debtors' properties to include main residences valued at less than 100,000 euros.

While the government appears to be considering extending the protection of debtors' main residence in some form, this is not likely to be in the context of existing legislation which expires at the end of the year.

Meanwhile, talks with creditors on the possibility of a fresh repayment plan for up to 120 installments have frozen.

Greek banks are proposing that the protection limit on the objective value of debtors' main residences be reduced to 100,000 euros in the context of the Katseli law.

That would signify a drastic decline from the current level that starts at 180,000 euros and can rise up to 280,000 euros depending on the number of children in a household.