The Finance Ministry anticipates fresh debt settlements from banks and management organizations over the next five months, ranging from 1.5 to 1.8 billion euros through the out-of-court settlement mechanism.
The goal is €3.9 billion in out-of-court settlements, increasing the effectiveness of the mechanism, which, according to data released by the Finance Ministry, offers settlements with an average write-off of around 20% for debts to the state and 30.8% for debts to financial institutions.
The message to banks and management companies to expedite this process was delivered during meetings held on Wednesday and Thursday by Finance Minister Christos Staikouras with representatives of the financial sector.
To date, 6,400 requests for debt settlements to the tune of €2.1 billion have been processed through the out-of-court system.
Moreover, another 5,500 requests for debts totaling €3.7 billion are in the final application and negotiation stage, while 33,900 requests for debts totaling €19.5 billion are in the initial submission stage.
The total number of applications for adjustments is 45,800 and the value of loans to be adjusted amount to €25.3 billion.
According to the finance minister, the fact that the number of completed applications from citizens and the rate of debt adjustments are growing every month confirms that the process has been the most successful in the last 12 years.
More specifically, according to data from the Special Secretariat for Private Debt, 74% of debt settlements or candidates for settlements concern individuals, compared to companies (26%). Furthermore, 79% are to banks and management companies and 21% to the public sector.
The average duration of settlement for debts to the public sector is 18 years and for debts to financial institutions it is 15 years, while 33% of debts were settled over a duration of more than 20 years.
Moreover, 39% of the settlements (around €320 million) have received a write-off rate of more than 30%, while 54% of settlement proposals have been accepted by debtors (€991 million out of €1.8 billion),
The approval rate by banks and management companies is 63% and by the public sector is 93%.