By Vangelis Dourakis

In the “final line” there is the issue of loans to Swiss francs, which has trapped thousands of families in a tortured cycle of burdens with unbearable interest: at the “headquarters” of Niki Street and specifically in General Secretariat for Financial and Private Debt Managementunder Theon Alabasithe “formula” is formed that will allow Swiss franc borrowers to…
“They are.”

Any solution given is clear that it will move on three axes:

First, it will take into account the relevant “legal reality” as shaped by the court rulings on these cases, both in Greece and the rest of Europe. Second, it will ensure that the banking system does not face … turmoil and
Third, it will be viable for borrowers.

When does the issue of loans closes in Swiss franc

The effort is being made to finally “close” the issue of loans in Swiss francs until the end of March, not
But it is possible to “pull” a little further.

In essence, the “table” has been settled on the standards of the out -of -court mechanism, which will allow the repayment of the incomprehensible amounts of interest burdened by borrowers.

This provides for debt repayment in many installments – with their number ranging between 220 to 440 – and will be accompanied by a “haircut” forecast.

The proposal to be submitted will take into account every borrower to repay their debts.

The “attempt” to incorporate loans into Swiss franc directly to the provisions of the out -of -court mechanism was not possible, as in most cases this could not be made of income criteria. This searches for the appropriate “formula” that will bypass this “obstacle”.

The “recipe” to be adopted for borrowers

The estimate is that the government’s proposal concerns 50,000 to 60,000 borrowers. Those who have repaid their loans or have accepted some arrangements will stay out of any “recipe” eventually adopted.

On the basis of the plans, loans in Swiss francs will receive a “haircut” analogous to the increase in the change in the Swiss Franco exchange rate from the time of the loan to the present day.

In the period 2006-2008, when the large volume of this type of loan was granted to our country, 1 euro corresponded to about 1.60-1.65 Swiss francs, and today is exchanged against 0.94 (a decrease of about 70%).

The change in exchange was made after the Swiss Central Bank decision to lift in 2015 the fixed exchange rate against the euro (which it launched in 2011, with 1 euro corresponding to 1.20 Swiss francs).

How were those who borrowed in Swiss francs were “trapped”

What exactly happened and were “trapped” by those who borrowed in Swiss franc? As mentioned above, during the years 2006-2008, most of them were temptation to receive these types of loans, the equivalence of the two coins stood at 1.6, that is, with 1 euro bought 1.6 Swiss francs.

However, this equality in 2009 began to fall and follow a constant downward trend, until 2011, when it was stabilized by the Central Bank of Switzerland at 1,20.

However, since 15.1.2015 the exchange rate “unlocked” again and today it is almost 1 to 1.

So, the euro was underestimated by the Swiss franc, the more the borrower needed a monthly borrower to buy the Swiss francs of each monthly installment.

At the same time, the total debt of the loan capital of the loan is increasing, because although this is reduced by the payments respectively, this amount as it corresponds to euro is increased.

For example, a loan of 150,000 Swiss francs in 2007 corresponded to 93,750 euros with the equivalence of the two coins then to 1.6. The same loan today corresponds to 150,000 euros, as the equivalence of the two coins amounts to 1 to 1.

This treaty resulted in the debts of those who had received loans to Swiss francs constantly increasing, while many of the borrowers arrived to owe 70% more than the initial capital of the loan.