ECONOMY

Troika OKs debt payment plan

Following a meeting between Development Minister Nikos Dendias and the troika representatives on Wednesday, the government is reportedly very close to sealing an agreement with its creditors on its plan for the repayment of corporate debts to banks and the state.

The agreement may well be completed as a part of the current negotiations, as the representatives of the European Commission, European Central Bank and International Monetary Fund are said to have raised no obstacles to the plan, which provides for companies to pay their expired debts in up to 120 installments, with the waiving of fines and other penalties.

The government was able to respond to all the troika inspectors’ concerns expressed as they studied the bill, particularly regarding the possibility of “moral hazard.”

Kathimerini understands that while corporations will be able to repay their debts to banks in up to 120 installments, they will get a maximum of 100 for their debts to the tax authorities and the social security funds, so that the plan is in line with that of the ministries of Finance and Labor for the repayment of expired debts.

While small and medium-sized enterprises with up to nine employees will be allowed to pay their debts to state and social security funds in 100 installments, bigger companies could get fewer, although this is not yet certain. It has been proposed that debtors who get to pay their bank in 50 installments will also get to pay their debts to the state in 50 tranches too, while those granted 120 installments to pay the banks will get to pay the state in 100 tranches.

Provided Greece exits its financial crisis, the law on bankruptcy for corporations and households will replace the regulation regarding the settlement of nonperforming corporate loans and the 2010 law on overindebted households within a year. “There will always be some sort of protection for the main residence,” a top Development Ministry official stressed on Wednesday after the meeting with the troika.