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State aid to help laid-off workers with mortgage payments starts in January

A state aid programme for people who are unemployed due to the economic crisis who cannot make their mortgage payments will become effective on January 1, 2010, according to the Finance Ministry, which will submit a report on the safeguards in this programme to the next government session, the TASR newswire reported.

A state aid programme for people who are unemployed due to the economic crisis who cannot make their mortgage payments will become effective on January 1, 2010, according to the Finance Ministry, which will submit a report on the safeguards in this programme to the next government session, the TASR newswire reported.

A working group has prepared a contract to be signed by the Slovak Consolidation Bank and commercial banks. The contract creates a framework for this programme, while several changes in legislation need to be approved, TASR was told by the ministry's spokesman, Miroslav Šmál. These changes pertain to legislation about banks, budgetary rules and consumer loans.

The state aid is designed for those who after January 1 2009 lost or will lose their jobs due to the crisis and don't have the financial resources to pay their loans, initiated prior to 2009, that were provided for housing units in which debtors have their permanent residence.

The total sum of such a loan must not exceed €83,000. The Slovak Bank Association estimates that if unemployment increases by 44,000 people there could be approximately 4,400 defaulted loans within the time period the measure is in effect. It was estimated that €12.4 million will therefore be needed. As the aid is in the form of loans, it won't have an impact on the budget or the public finance deficit.

Compiled by Zuzana Vilikovská from press reports
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