Carrots to be added to repayment plans

The Finance Ministry and the country’s creditors are preparing a plan that will provide debtors to the state or the social security funds with a strong incentive to remain in their existing payment programs by rewarding consistent repayment with discounts.

Among the ideas on the table is a bonus of 20 percent off penalties imposed on debtors who have entered one of the existing payment programs, provided that they stick to it and do not opt for another version.

Increasing numbers of debtors are stopping the repayment of their dues, even if they had been consistent in the past. As a result the ministries of Finance and Labor are in constant negotiations with the technical teams from the eurozone and the International Monetary Fund in a bid to converge on the final text of the new regulation.

Sources say that the creditors have given their provisional consent to the principles of the regulation, which according to government officials will have to be tabled in Parliament by Tuesday, with or without the creditors’ agreement.

Kathimerini understands there are three scenarios on the negotiating table. The first and the second concern the provision of incentives for debtors to remain in their payment programs, while the third is about rewarding consistent repayment in the case of debtors that decide to enter a new payment plan.

The first plan provides for the revision of the original debt factoring in the new reductions to fines and penalties, which would significantly reduce the outstanding amount. The second concerns an additional bonus of a 20 percent reduction in penalties, which should prove strong enough to keep debtors in their payment programs, while the third provides for a revision of the amount due even for those who choose a new payment plan.

Regardless of the above scenarios, there are no changes expected as regards the number of installments for the repayment of debts to the state and social security funds, with a maximum number of 100 for debts up to 15,000 euros and 72 for higher amounts. It also appears that the government and its creditors have agreed on a revised interest rate of 4.5 percent, from a previous 8.05 percent.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.