Greece launches out-of-court debt settlement mechanism

Friday, August 4th, 2017
Last Update: 15:12

More than 70 companies have applied for inclusion in an online platform for an out-of-court debt settlement mechanism in the first few hours after the official launch of the platform, according to the first data from the platform΄s operation, which was launched this morning by Economy Minister Dimitris Papadimitriou.

Papadimitriou stated that it was an important tool for companies and added: "The platform can be used by hundreds of thousands of companies, putting an ending to the over-indebtedness caused by the financial crisis in recent years and all of these start today."

He noted that the relevant law was passed in May and that in three months the government had committed that the mechanism would be ready. "We are implementing this commitment today, despite criticism and negative predictions when the law was passed in parliament," the minister said.

Papadimitriou said that the mechanism will contribute to the unsecured debts of the state, social insurance funds and will especially help the banks that have binding targets for a significant reduction of their non-performing exposures, which, as the minister added, have been decreasing in recent months. "However, the reduction should be accelerated to settle around 17 billion euros of nominal value of non-performing exposures at the end of 2019," the minister said, adding that "The out-of-court mechanism can be a tool in this direction".

Interested parties can enter the platform via the link on the Special Secretariat for Private Debt Management website and submit an application for participating in the mechanism. Borrowers who wish to join the arrangement should be enrolled with the TAXIS codes on the online platform.

Subsequently, the case is assigned to a coordinator, who will contact creditors for a solution on how to handle debts.

Special Secretary for Private Debt Management, Fotis Kourmousis, said that for small businesses, the process can take a few weeks, and for up to 10 months for a large enterprise.

According to estimates of Economy ministry, 150,000 to 400,000 enterprises could participate in the mechanism.

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