SYRIZA abstained, PASOK declared “present”, while KKE and MeRA25 voted against.
After a long meeting that started at 10 in the morning, the bill of the Ministry of Finance, “regulations for the acquisition of occupied properties of the private property of the State and the exemption from ENFIA of areas that have affected by natural disasters”.
ND and PASOK-KINAL voted in favor of its principle, while KKE and MeRA25 voted against, while Hellenic Solution declared “present”.
The amendment with improvements to the out-of-court debt settlement mechanism was also incorporated into the bill.
The amendment was voted for by ND and Hellenic Solution, while PASOK-KINAL voted “present” and KKE together with MeRA25 voted against.
It is noted that SYRIZA abstains from the parliamentary votes.
The 11 improvements to the extrajudicial mechanism
The 11 improvements that the new law brings to the extrajudicial mechanism were described by the Minister of Finance, Christos Staikouras, in his speech to the Parliament.
“With the proposed provisions, significant improvements are made to the out-of-court debt settlement mechanism. A mechanism that is proving to be the most successful debt settlement tool of the last 12 years, among those put in place by successive governments.
Specifically, until yesterday, 3,755 debtors had settled debts to the State and financial institutions, totaling 1.22 billion euros. It is noteworthy that this number increased by 124 borrowers in just 6 days,” emphasized Mr. Staikouras and continued:
“Also, the approval rate of applications has risen to 70%, with an upward trend. In comparison, in the previous out-of-court mechanism of the SYRIZA Government, only 2,200 debtors completed the debt settlement process. But despite significant progress in recent months, we are not yet where we want to be.
Mainly the loan managers, but also the banks, have to work harder and more efficiently, improve their performance and the regulation proposals to the citizens.
We as the government seek to improve the effectiveness of the extrajudicial mechanism.”
The proposed provisions:
- Obligation to justify rejection of regulation proposal. Both creditors and debtors are required to post on the platform the reasons for rejecting the proposal automatically generated by the algorithm. In this way, the applications will be consciously managed, while the possible refusal of the financial institutions to a settlement proposal will be documented by fully justified circumstances concerning the respective debtor.
- Possibility of inclusion of unique debts. The limitation of the rate of 90% per creditor is abolished, giving the possibility to debtors with a single debt of more than 10,000 euros to financial institutions, such as households with a mortgage loan, to settle their debt and save their property .
- Possibility of keeping the current or already settled debts in the settlement proposal proposed to him, if the debtor so wishes, subject to conditions.
- Possibility of joining non-profit legal entities in order to settle their debts.
- Possibility of settling debts owed to third parties (such as debts to municipalities), which are collected by the tax administration.
- Consent of microcreditors to the regulation proposal, when they have no collateral, subject to conditions.
- Modification of the mediation procedure with the financial institutions in favor of the debtor.
- Deletion of 100% of the interest of the arrangement corresponding to the future installments for the State, in case of prepayment thereof.
- Reduction of the debt settlement interest rate, and its conversion from floating to fixed, with a Joint Ministerial Decision, the signature of which has been initiated, under the authorization of the law. Now, the new interest rate for the settlement of debts to the State is set at 3% fixed, from Euribor plus 5 percentage points that were until today. In fact, both the abolition of the prepayment penalty and the reduction of the interest rate, occupy for the future the arrangements already achieved through the out-of-court mechanism.
- Possibility of receiving, through the platform, a certificate of debts to financial institutions and the State for any legal use.
- Clarification, in a clear way, of what is considered a final submission of a request to the extrajudicial mechanism, which is also a necessary condition for the protection of the debtor.
Through the above improvements it is expected:
- making more sustainable arrangements with favorable terms and a long-term horizon;
- increasing creditor acceptability of debt settlement proposals generated by the algorithm;
- greater shielding of debtors’ assets from enforcement measures;
- more flexibility on the part of debtors to regulate their debts, while also maintaining existing favorable arrangements for part of their debts that they entered into in the past, and
- greater transparency at all stages of debt settlement.
“The result of all this effort and the coordinated actions we have undertaken as a Government, is the best possible management and effective treatment of the problem of private debt. A problem that we deal with dynamically, without hiding it “under the carpet” by transferring it to the next generations. A problem that we face by adopting serious, responsible, definitive and sustainable solutions” concluded Mr. Staikouras.
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