The Latvian Central Bank offered to write off citizens debts on your mortgage

The new head of the Central Bank of Latvia mārtiņš Kazaks offered to write off all the debts on mortgage loans that have been taken by Latvians in the “fat years” prior to the crisis of 2008-2009. According to Kazaks, it must “return in the economic turnover” of more than 10 thousand people.

On his own initiative, kasaks said in an interview on Latvian television. He recalled that many people, until 2008, took out loans, mostly mortgages, which later failed to pay. Some had taken shelter, but in many cases it was not enough to repay debts. Banks consider these debts are non-refundable, but technically didn’t write them. The amount of debt he estimated at €500 million.

Kazaks believes that fair to write off the debts because the banks and so have not much hope of a return, and will return in the economic turnover of about 10 thousand Latvians. Debts led to the fact that some Latvians moved into the shadow economy, and some even emigrated, said the head of the Central Bank of Latvia.

This is not the first initiative of the Latvian authorities to combat the debt load of the population. In the summer of 2019 the justice of the country proposed to simplify the procedure of bankruptcy: it can make the inhabitants of Latvia with debts of 2-4 thousand euros. The last procedure will have successfully completed a course in financial literacy.

The proportion of borrowers in Latvia, experiencing difficulties with debt repayment, has increased from 43% in 2017 up to 45% in 2018, said the head of the Latvian Centre for consumer rights protection (CSP) Baiba Vitolinja.

In Russia seriously debt relief is not discussed — with such proposals is only the populist opposition LDPR and “Fair Russia”. Mikhail Mishustin said that a negative attitude to this initiative.

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