Finance Minister Christos Staikouras is putting pressure on banks and servicers to intensify efforts towards finding solutions for the settlement of nonperforming loans, both through out-of-court settlements and through bilateral agreements.
Although it acknowledges that the percentage of loan settlements has increased significantly, the ministry believes that the final number of settlements is still too far below ministry expectations.
The issue was discussed during a meeting on Thursday, with the ministry urging banks and services to accelerate efforts towards this goal.
According to sources, banks and servicers do not seem keen on out-of-court settlements since they fear that any haircut may be larger than expected.
The ministry believes that both the out-of-court and bilateral deals are the only way to go towards reducing private debt and avoid foreclosures and auctions.
According to official figures collected by the Private Debt Management Secretariat, banks reject debt settlements at a rate of 67%, while servicers at a rate of 34%.
The out-of-court settlement offers repayment deals of up to 240 installments for debts to the state and up to 420 installments for debts to banks.
The ministry is determined to push ahead with the project of debt settlements.