Debt settlement

Only business owners with no real estate properties will qualify for a partial write-off of corporate debts in the context of the extrajudicial settlement mechanism. This criterion excludes the owner's main residence and the production properties, i.e. the professional properties used for the entrepreneurial activity.

The process for companies to sign up for the out-of-court debt settlement scheme after the recent launch of the online platform allowing firms to apply has proved difficult and time-consuming.

An Economy Ministry bill presented on Monday would see the restoration of a 120-installment debt payment scheme two years after a previous one from 2015. It would also offer the option of a partial write-off of a debt to the state not only to enterprises that enter the extrajudicial mechanism but also freelancers who were supposed to be excluded from this process.

An Economy Ministry bill published on Tuesday concerning out-of-court debt settlements provides for the payment of dues according to the corporation's or entrepreneur's ability to do so, with the writeoff of the rest of the arrears at the end of an agreed period.

The delays in the tabling of a bill concerning out-of-court debt settlements and the immunity of bank officials are generating concerns regarding the achievement of the target set by the European Central Bank's Single Supervisory Mechanism (SSM) for a 40.2-billion-euro reduction in the sum of bad loans by the end of 2019.

A Bank of Greece interim monetary policy report for 2016 estimates that the number of non performing loans to be settled by Greek banks in 2016 will exceed 200,000. The report states that banks will opt to take this route, along with loan write offs, instead of liquidations and transfers. The report shows that long term loan settlements were up by 11%, amounting to 44% in the 9 months of 2016.

The debt settlements that power consumers have arranged with Public Power Corporation appear to have gone down the same road as those for debts to the state and the social security funds. Many people have signed up to the PPC payment programs, allowing them to settle debts in up to 36 installments, but a large number have proved unable to keep up with their obligations.

Millions of debtors in Greece will face a  power outage and a water service interruption if they don’t  make a settlement payment until the 30th of September, according to the administrations of DEH and EYDAP.

The government's plan for the settlement of nonperforming loans and the streamlining of corporations, small and large, foresees slashing the debts of enterprises to tax authorities, social security funds and banks, according to a draft law that is currently under preparation.

The General Secretariat of Public Revenue announced late on Monday announced that taxpayers should seek to enter a debt settlement of up to 24 installments as the period of grace they had been offered in paying off debt due to capital controls has lapsed. The only parties protected are those who yield less than 1,250 euros per month.