The balloon began to pop. The poor could no longer repay housing loans which is - at the beginning very cheap - bank granted and allowed, despite the fact that they were unemployed and had no property to mortgage.
The moment the poor could no longer pay back what was actually an expensive loan with a variable interest rate, they abandoned their properties, leaving the banks to struggle with empty apartments and houses.
Suddenly, the banks had a huge amount of real estate they didn't need and were in trouble. They gave many such loans to the poor, without the basic assumption - that the poor would really be able to repay the loan.
When the bubble burst, it did not mean only a disruption in the real estate market - the crisis spread to the entire financial market, and immediately afterwards to other countries. The biggest banks failed due to overexposure to these bad loans, called "NINJA" - no income, no job, no assets (persons who have no income, job, or property). The damage was so great that the state - that is, its citizens - had to take over the banks' private risk and bail them out.
The world has fallen into crisis.
The president's project, our risk
The reader might have thought at the beginning that it was about new, "cheap" loans that Vučić intended to give - from state money, of course - to students, young people, the unemployed and, in general, people who are not able to repay those loans. But, although similar, the previous story already happened in 2007 and 2008 - readers remember it as the great world economic crisis that started in the USA.
Certainly, a similar scenario will not happen to the world because of Vučić's new idea, which he came up with just when those young people and those students, to whom they want to introduce subsidized loans, started a mass rebellion because of general corruption in the state, which led to the death of 15 people in Novi Sad.
However, what could be expected from the above-mentioned events in Serbia if Vučić's project comes to life?
First of all, no matter how much this adventure will cost, the state will have to borrow for it - either it, or the bank Poštanska štedionica (the only remaining state bank). Namely, other banks, so far, have not shown nearly as much enthusiasm for this venture as the president. No wonder - who in their right mind would give unemployed people a home loan? This President's joke will be paid for - as always - by the citizens of this country.
Pure deception
How much will that amount to? According to the president's announcement, only the first part of the "action" will cost the state 130 million euros in direct subsidies.
Then, it is certain that a number of people will not be able to pay back the loan, the moment the conditions become marketable - which is after six years. What will happen to them afterwards, and what will happen to those properties?
The government even cheekily claims that after six years of subsidies, the installment for a 100.000 euro apartment will cost something like 450 euro and notes that interest rates will soon start to fall. Really? You know what the rate will be in 10 or 30 years, so you're misleading people like that?
Furthermore, how will young people in about 40 square meters establish a multi-member family, as the president wishes? They will be trapped by a 40-year loan until they are 60 or so years old, by which time they should already have grandchildren.
A panic reaction
The inability of the young (and not so young) to buy their first apartment is a serious problem for the state, but one thing is certain: it is not done this way. Let's not start with the rule of law and an orderly state as a basis to stop the outflow of educated young people from the state - a sufficient reason why it is not done this way is the fact that it is a forced move by Vučić after the students put serious pressure on him and his government ( and they still ignore him).
A serious state would, for example, remove the tax from the first real estate, and heavily and progressively tax those with 5, 10 or 150 apartments, which would further - due to the sudden increase in the supply of apartments on the market - lead to a drop in prices, so the people of Belgrade and Novi Sad would not would pay per square meter as if they lived in a western country of the European Union.
Instead, Vučić announces a new increase in demand, artificially created by a state gift, which will lead to further price increases, so today's young people and students and the unemployed could "take a picture" with those 450 euro installments after the sixth year of loan repayment.
In short, this looks a lot like the panic reaction and "off the top of my head" 10 measures announced after the mass murder in "Ribnikar". One of those measures, let's remember, was the fight against the "dark net".
Looks like we haven't beaten him yet.
