By Renee Maltezou and Jean-Baptiste Vey
ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras on Friday said his country would fully meet its obligations under a multi-billion euro bailout but would not tolerate mass foreclosures on problem mortgage loans for thousands of indebted people.
Setting a red line in talks with the country's lenders now in Athens for consultations, Tsipras said turning the country into an "arena of confiscations" of homes was out of the question.
Although he did not so directly, he was implicitly referring to talks with creditors, which have hit a snag over protection of primary residences of homeowners who cannot afford to pay their mortgages.
"Some may be attempting to revive a debate (on Greece exiting the euro) ... by delaying the implementation of reviews and delaying the recapitalisation of banks," Tsipras told journalists after talks with French President Francois Hollande.
Representatives of Greece's lenders are in Athens assessing compliance with reforms required under the 86 billion-euro bailout. Athens wants the review concluded soon so it can proceed with debt-relief talks and complete the recapitalisation of its four main banks by the end of the year.
Hollande, in Greece on a two-day visit, has sided with Tsipras's call for debt renegotiation. In a speech to parliament, he also said homeowners should be protected.
HOMEOWNERS
"It is very important for commitments to be met, and for there to be no doubts over fundamental rights of families in Greece - the right for a roof over their heads - and here I'm speaking about confiscations of primary residences," Hollande said.
Greek officials have said there are disagreements with lenders on a mechanism to tackle non-performing loans at banks. The ratio of non-performing loans at Greek banks was 35.6 percent in the first quarter, the highest ratio in Europe bar Cyprus.
A high rate of non-performing loans, after years of recession and high unemployment, is one of the main reasons capital buffers of Greek banks are eroded. Lenders were also weakened by capital flight earlier this year when Greece teetered on the verge of toppling out of the euro.
Banks are in line to get a portion of bailout cash by the end of the year, but a high proportion of bad loans also mean banks are reluctant to extend credit, stunting potential growth.
Athens wants protection from foreclosures to cover property values of at least 200,000 euros. Lenders insist the threshold should not exceed 120,000. Greece calculates that would cover only 17 percent of mortgage holders.
Tsipras said Greece would meet its bailout obligations, though he said the country had its limits.
"It is one thing meeting our obligations, and a completely different matter for one to consider Greece is a convict serving jail time. It isn't." Tsipras said.
An estimated 320,000 homeowners are behind on their mortgages in the country. About 130,000 of them have applied for foreclosure protection under an existing law, which sets a threshold of 300,000 euros.