InsiderEconomyEstia scheme launch postponed again

Estia scheme launch postponed again

This month’s launch of Estia government debt relief scheme for vulnerable homeowners is postponed once again. Also postponed is the launch of electronic auctions – two interrelated issues. Because, on the one hand, electronic auctions will put the property of a borrower who does not pay due instalments under the hammer. On the other hand, Estia scheme will provide a network of protection for borrowers who are unable to pay off their loans. Both issues are now under review by the Legal Service to prevent any possible constitutional obstacles.

The Finance Ministry had prepared a road plan over the implementation of Estia with eight set timetables, none of which have been met. The delay was also attributed to changes in the criteria of the scheme by the European Commission’s Competition Directorate. Initially, the submission of applications by borrowers was set to begin on December 1, 2018 and end on February 28, 2019, something that never happened.  Then came the parliament’s refusal to approve the scheme’s proposed €33 million budget, causing further delay.

After the bill’s parliamentary approval, leaked information said that the Finance Ministry was planning to call for submission of applications within February. This timetable was never met either, and submission date was moved to March. However, only 10 days before the month’s end and it is still unclear when the implementation of the Scheme will kick off.

The new delay is due to a memorandum, which is still under review by the Legal Service, to be signed between the island’s banks with the state. It is worth noting that due to the delay in submitting applications, the remaining timetables will also have to be moved. Including the assessment of eligibility criteria by banks and approval of applications by the relevant government department.

Senior Finance Ministry officer Andreas Charalambous told Phileleftheros that the delay will not cause any serious problems since the provided by the scheme subsidy by the state of one-third of the borrower’s instalment will take place at the end of the year.

As regards electronic auctions, the government initially targeted their implementation sometime between June and September, but these are now also postponed till the fourth quarter of the year.

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