ATHENS, Greece (AP) -- Greece's conservative-led government said Thursday it will water down laws protecting homeowners from foreclosures, but insisted that vulnerable borrowers worst-hit by the country's financial woes will still not lose their homes.
Since the Greek debt crisis broke in late 2009, triggering global economic unrest and throwing the eurozone into disarray, banks have been banned from repossessing primary residences worth up to 200,000 euros ($270,000).
That shielded Greeks from the wave of evictions afflicting Spain, another battered southern European economy where about 30,000 people lost their primary residences last year because of non-payment of mortgages.
Prime Minister Antonis Samaras said his government is working on amendments targeting those who can pay off their mortgages but don't, while retaining protection for the poor.
"Primary residences of socially weak citizens and those who can demonstrably not service their loans will be absolutely protected," he said after talks with key coalition ally Evangelos Venizelos, Greece's foreign minister who heads the small Socialist party.
The repossession issue is politically explosive, as a handful of lawmakers in Samaras' coalition, which has a slender parliamentary majority, have threatened to block any effort to lift the ban.
The main opposition Syriza radical left coalition called Thursday for full debt forgiveness for all Greeks below the poverty line.
Greece is implementing harsh spending cuts and reforms demanded by creditors in return for rescue loans that have kept the country afloat since it lost access to bond markets in 2010.
But, while largely taming runaway budget deficits, the austerity has plunged the economy into a deep recession and led to record unemployment.
The real estate market has taken a strong hit, with prices falling in real terms below levels last seen a decade ago. According to the Bank of Greece, home prices have dropped about 30 percent since 2009, while the market is plagued by excess supply and high taxation. Despite a sharp fall in rents, swathes of properties remain untenanted, including prime commercial real estate in the country's largest cities.
Meanwhile, tens of thousands of homeowners who took out mortgages in a housing boom that just preceded the crisis are struggling to repay loans on their depreciated properties. Some 21 percent of housing loans were in arrears at the end of last year, up from 15 percent in 2011, and the figure is expected to exceed 25 percent this year.
Venizelos, the Socialist party leader, said few of these borrowers would end up homeless.
"The figures I have seen show there is no problem," he said. "There are very few dishonest people who, although they are not truly unable to pay, hide behind those who do need protection."
He said weeding ban exploiters and allowing the sale of repossessed properties would boost domestic lenders, which required billions of euros from European rescue funds to keep going.
"The issue is not the auctions, but rather to restart housing credit to the benefit of the entire economy," he said.
It was unclear how many homeowners would be affected, with media estimates ranging from 1,000 to 10,000. Government officials say the changes would affect people with other properties or substantial bank accounts, and a finance ministry task force is racing to identify such borrowers.
Greece's Pomida property federation said the government's plans would send a badly-needed message to unscrupulous borrowers.
"It's good that the country protected people in trouble at the beginning of the crisis," Pomida head Stratos Paradias told The Associated Press. "But this protection can't apply to everyone, forever, because then you give the message to all borrowers that they do not really have to repay their loans."
"Banks are not social policy tools, they are businesses," he said. "We have become a society that demonizes lenders and sanctifies borrowers."