Cyprus is truly a fascinating country. Have you heard of the ESTIA scheme? What is happening there is extraordinary. A quick thread.
The general idea of the scheme is great! The purpose is "to deliver a socially acceptable and financially sustainable restructuring solution to vulnerable borrowers who have mortgaged their primary residence".
Indeed, that sounds like a great idea. But how ?
Indeed, that sounds like a great idea. But how ?
Very straightforward.
"The government subsidizes part of the repayment instalments by 1/3 of the restructured loan."
WOW. FREE MONEY ! THAT'S GREAT! TAKE THE MONEY !
"The government subsidizes part of the repayment instalments by 1/3 of the restructured loan."
WOW. FREE MONEY ! THAT'S GREAT! TAKE THE MONEY !
But bizarrely the scheme is a total flop. Barely anyone uses it. Isn't this strange. Why would people refuse free money?
There's a catch: to get the free money you need to give data on your income and wealth.
There's a catch: to get the free money you need to give data on your income and wealth.
And believe it or not, people in Cyprus prefer to keep their finances secret than to get free government money !
How do you spell tax f... sorry, not the point of the thread. So you'd think banks are pissed off? Clients don't take the free money, so they can't repay! Surely, that's bad!
NO! THEY ARE SUPER HAPPY!
Why?
NO! THEY ARE SUPER HAPPY!
Why?
Because under the scheme, if people refuse the government's help, it's open bar for the bank to foreclose the assets 🤣
I mean, there are unintended consequences of public policy, and there is this. It's a work of art.
I mean, there are unintended consequences of public policy, and there is this. It's a work of art.
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