An out-of-court debt settlement mechanism is a significant, successful and efficient tool, Finance Minister Christos Staikouras said on Wednesday, adding that a total of 3,755 debtors have already settled their debt to the state and to financial institutions, worth more than 1.22 billion euros.
The Greek FinMin said that during the last six days 124 new borrowers agreed to settle their private debt through the mechanism and said that an amendment tabled to Parliament envisages improvements in the procedure. Creditors' applications that started in the summer of 2022 jumped to 25% to 70% currently and rising, Staikouras said, adding that despite the significant progress made in the last month "we are still not where we want to be" and urged servicers and banks to work harder and more efficiently to improve their performance and to offer beter debt solutions to citizens.
The new legislation envisages, among others: the introduction of mandatory explanation for rejecting a debt settlement application, offering debtors with one debt of more than 10,000 euros to settle their debt and save their property, settling debt to third parties, such as municipalities, safeguarding the consensus of micro-creditors in debt settlement proposales, amending the intermediation process to the benefit of debtors, write down 100% of interest in cases of full repayment of debt and reducing the interest rates on debt settlement schemes to a fixed 3%.
Staikouras said these improvements will help to better deal with a serious problem facing the country in the last 12 years, that of private debt. The new legislation also envisages to deal with the ownership of public property enroached by individuals. The new law will allow the purchase of these properties which are estimated to be around 20,000 around the country.
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