Many of these loans had low initial interest rates that reset to market rates after a couple of years, which resulted in a significant increase in the monthly payment. Had house prices continued to rise, many borrowers would have been able to refinance to avoid higher payments and perhaps to extract accumulated home equity to use for future payments.
No country can be indifferent to what is going on in another European country – not only for the sake of solidarity, but also for economic reasons. I hope that this is understood by the politicians. What should they do? There are proposals to use the European Stability Mechanism or the European Investment Bank. The issuance of one-off “corona bonds” would also be conceivable.