EVERYONE seems to be against the government’s foreclosures bill – organised citizens’ groups, newspaper columnists, unions, political parties, lawyers – and virtually everyone, it seems, will be invited to next week’s scheduled House finance committee meeting to express their views. As always, the debate is high on emotion and low on rationality. All we hear are sweeping statements about protecting hapless home-owners that have fallen on hard times and stopping the banks from throwing them out on to the streets.
So far, the government has been unable to answer these fears convincingly because it is also resorting to scare-mongering, warning that if the bill is not approved the next tranche of financial assistance will not be released by the international lenders. While it is necessary to remind everyone of this possibility, the government should be trying to build a case based on facts and figures. And once it had these figures at hand it would be in a much better position to argue its case.
It is incredible that after months of public debate nobody has bothered to find out how many primary residences are burdened with non-performing loans (NPLs). There are some figures on the Central Bank website but these are not enough to reach adequate conclusions. This is the first thing the government should have done. Then it should have bracketed these into price categories and asked the banks how many of the owners were not paying because they were unemployed and how many were taking advantage of the situation; it should also have processed business loans, for each sector of the economy. It could not have been difficult to gather all this information from the banks and the co-ops, process it and draft a policy for protecting the most vulnerable of the home-owners.
Once the government had these figures, it could have drafted a credible policy for protecting the most vulnerable groups, instead of the president giving vague assurances that the parties have been dismissing as empty talk. The government would also have facts to counter the scare-mongering of the parties which has had a free rein because of the absence of data. The data might show that the percentage of NPLs for primary residences was very high in which case the government would be unable to offer real assistance, but it is important to know the real picture.
We need to do our homework before taking important decisions, and the public debate that precedes the decisions must be based on facts and real data rather than gut feeling and sweeping generalisations. This failure of government and the political parties, which always opt for the easy way of doing things, is a big contributory factor to our current woes.