29.01.2014

A directive regulating mortgage credits was adopted at yesterday's meeting of the Economic and Financial Affairs Council (ECOFIN) meeting in Brussels which was also attended by Minister of Finance Petar Chobanov. The directive is aimed at creating a single market for mortgage credits in the EU for the benefit of consumers, creditors and credit intermediaries. It seeks to establish a high level of protection whilst addressing irresponsible lending and borrowing which, in the recent context of financial crisis, has contributed to increased numbers of unaffordable loans, defaults and foreclosures. By ensuring that mortgage credit markets operate in a responsible manner, the act also seeks to promote financial stability.

The new directive establishes conditions to ensure a high degree of professionalism amongst creditors and credit intermediaries. It sets out principles for marketing and advertising, as well as requirements for information on the borrowing rate and any possible risks. Provisions require the creditor to assess the creditworthiness of the consumer. The text establishes regulatory and supervisory principles with regard to credit intermediaries and non-credit institutions. Member states will have two years to transpose the directive into their national laws.

The Council took note of the presentation by the Hellenic presidency of a work programme on economic and financial matters. The EU Ministers of Finance also discussed the implementation of the Compact for Growth and Jobs in connection to the follow-up to the December European Council. Implementing the Stability and Growth Pact, Draft Council Decision on the existence of an excessive deficit in Croatia and Draft Council Recommendation with a view to bringing an end to the situation of an excessive government deficit in Croatia were adopted.