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European Commission approves Greece's home protection scheme

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European Commission approves Greece's home protection scheme

The European Commission approved Greece's home protection scheme after concluding that the scheme does not breach any of its state aid rules, Reuters reported Sept. 19.

The scheme has an annual budget of around €132 million and is designed to support householders who cannot meet their mortgage payments. Depending on their income and ability to pay a residual part of their monthly mortgage, eligible borrowers can receive a grant ranging from 20% to 50% of monthly loan payment through the scheme, the newswire said.

The EC said that the measure does not violate state aid rules and is likely to increase the amount of repayments that Greek banks receive on their nonperforming loans. The scheme is also not likely to create undue distortions of competition, as it is focused on ensuring that borrowers do not lose their houses, the commission added.

The development comes amid attempts by the Greek banking industry to reduce €80 billion in bad loans.