The President of the Republic deemed it imperative to reflect on home loans in terms of terms, interest rates, and monthly payments, highlighting the disastrous social consequences of rising interest rates and the current banking boom.
Marcelo Rebelo de Sousa issued this warning to the press after visiting the Food Bank Against Hunger (BA) in Alcantara, Lisbon, where he was hailed by President Isabel Jonet at approximately 11 p.m. this Saturday.
“It’s evident that housing credit is a problem”
“On the domestic front, there is an issue that merits consideration, as the Portuguese are highly reliant on bank loans, being among the Europeans who have placed a large bet on the purchase of a property and on short-term loans. This has resulted in a harsher penalty, not least because there is no rigid setting of rates and payments, which are updated as the interest rate increases, as the head of state pointed out.
Marcelo Rebelo de Sousa stated that he was anticipating a gradual decline in inflation, but that “it is evident that mortgage loans are a problem that should prompt a reconsideration of terms, rates, and payments.”
“There is a problem that must be addressed one of these days, and that is the fact that the financial system, specifically the banking industry, has experienced complex problems in the past, but is currently experiencing a period of relative simplicity. In terms of toxic debt, the economy is in a better place,” he noted.
In other terms, one must ask “how far should banking go to make up for previous negative periods with this [current] positive period?”
The President of the Republic stated that he had access to numbers, although he could not guarantee their precise nature, indicating that the banks “ended up with a significantly higher profit margin on mortgage loans than the average in Europe.”
Immediately thereafter, he noted that the bank had also experienced greater-than-average problems in prior years.
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Testo Ultra Still regarding the social effects of the interest rate increase.The head of state stated, “There are over one million housing loan contracts, which translates to between two and three million Portuguese affected by this issue.”
“It’s a lot of people and it’s heavy,” he noted, “if we remove the poverty line from the two million.”
Questioned about the European Central Bank’s interest rate increase lineThis Frankfurt-based institution, according to Marcelo Rebelo de Sousa, “fears adopting a less stringent policy in terms of raising interest rates and sending a negative signal regarding inflation.”
“However, the ECB is also aware that it is retarding the economy. Consequently, it is located in the center of the bridge. Then, contradictory tendencies exist. In some nations, inflation decreases, whereas in others, it does not”, he added.
