The Minister of National Economy and Finance, Mr. Kostis Hatzidakis, focused on the significant progress achieved in the reduction of bad loans and the strengthening of tools, such as the out-of-court debt settlement mechanism for the benefit of citizens, responding today in the Parliament to a Topical Question from the Member of Parliament, Mr. Giorgos Vlachos on the topic: “Protection of borrowers, guarantors and small and medium enterprises”.

As Mr. Hatzidakis pointed out “where in 2019, 100 green loans corresponded to 100 red loans, in 2024, 100 green loans now correspond to 50 red loans” underlining how non-performing loans to Banks and Servicers amounted to 92.2 billion euros in 2019 and decreased to 69.9 billion euros in June 2024. “This progress is not about the banks, as some argue, it is primarily about the borrowers. Because the loans also belong to the borrowers and they are the ones who are gradually freed from the burdens” he underlined.

Note, don’t you, how the arrangements of the extrajudicial mechanism are now moving at all-time high levels:

– In September 2024 a total of 23,713 successful arrangements for initial debts amounting to 7.9 billion euros are recorded from successful arrangements of initial debts of 3.26 billion euros in September 2023.

– Also, in September 2024 we had more cases approved by the extrajudicial mechanism by 52.2% compared to September 2023. And compared to September 2022, an increase of 75.7% is recorded.

– Even in August, when rates drop due to summer, arrangements were made for 2,608 borrowers corresponding to 150 million euros of debts.

Mr. Hatzidakis reminded that in 2019, the Government received an unprecedented situation – not only for national, but also for European data in relation to bad loans, as a result of the ten-year crisis that preceded – to deal with which it received six legislative initiatives (these are laws 4738 of 2020, 4818 of 2021, 4912 of 2022, 5024 of 2023, 5043 of 2023 and 5072 of 2023). Additionally, after the 2023 elections, the Government with the support of the Parliament:

• It imposed new obligations – especially information obligations – on servicers,
• Strengthened the extrajudicial mechanism,
• Widened its scope, for the benefit of vulnerable debtors and recently made it mandatory and more favorable for people with disabilities.

That is why, as the Minister of National Economy and Finance said, “we observe a much greater acceleration in the out-of-court mechanism, greater “haircuts” in debts with an average of -28% for Banks and Servicers, lower repayment rates and better treatment of those in real need”.

He also clarified that half of the measures proposed in the question have already been implemented or are being implemented (such as the publication of statistical data, the preliminary procedure before the imposition of confiscation, the mandatory operation of a personalized information platform for borrowers and the expansion in the perimeter of the extrajudicial mechanism that became mandatory for vulnerable debtors and mandatory and more favorable for people with disabilities). He also emphasized that it makes no sense to discuss measures that “will return us to the basic principles of the Katseli Law, with the result that they will harm and not benefit the borrowers”. As such he stated:

– the non-objective determination of the borrower who needs protection: as not only is there a question of transparency, but also a question of unpleasant surprises for borrowers from similar court decisions,
– the delays in the discussion of the cases by the courts which will lead not only to the perpetuation of the problem but also to unaffordable interest for the borrowers in case they are not vindicated.

Mr. Hatzidakis emphasized that the Government is always open to suggestions and improvement initiatives as evidenced by the adoption of new measures such as the 2023 laws after previous initiatives were tested in practice. “Things are improving and thanks to your vote” he noted adding that “we are here with responsibility and without populism to adopt those initiatives that actually serve the national economy, they take into account that in addition to “red” borrowers there are also “green” borrowers who with difficulty fulfill their obligations and also take into account the great pressure that too many “red” borrowers receive”.

The Minister of National Economy and Finance underlined that the progress made is recognized by all international organizations playing a decisive role in the significant upgrading of the Greek economy by international houses, in strengthening growth and employment, but also in supporting borrowers, after many years of morbidity and suffering.

“Obviously the Government is not complacent about a major social problem nor does it expect anyone to say “thank you”. We face and have faced the biggest, from this point of view, problem that existed in all of Europe. We are obliged to make this effort with sensitivity but also with seriousness” noted Mr. Hatzidakis adding that “We must continue on this path because it brings results and we owe that to the Greeks. We must learn from the experiences of the past. We are not complacent and must implement the measures we announced and voted for. Therefore, we are here to improve, we are here to listen to suggestions, and yours above all, which come to improve things”. He emphasized, however, that “it would be paradoxical to re-adopt measures that have already been voted and adopted by the Government. It would also be paradoxical to adopt measures that have been tried and failed,” and noted that “we will move forward based on good practices internationally, away from populist approaches. I am sure that we both have the same concern and we both do not want to do something populist but serious and responsible. I am always at your disposal in my office and in the Parliament to discuss any matter within the framework of the principles and directions of the New Democracy”.