Troika prompts ministry to tighten debt repayments

Troika prompts ministry to tighten debt repayments

The government’s plans for allowing taxpayers to make debt repayments to the state in 100 installments has been halted by the country’s lenders, who are refusing to consent to the scheme on the grounds that it will inflate debts to the state coffers.

Alternate Finance Minister Tryfon Alexiadis told Skai there will be no new regulation for the reypayments, and called on debtors either to service their debts or make use of the existing framework of 12 or 24 installments.

Greece’s lenders had been increasing the pressure recently to make the debt repayment process for those who owe money to the state more rigorous.

As of July 1, the legal framework was tightened for those with debts to the state. As a result, those who were already in the 100-installment scheme learned they would have to pay any debts incurred after that date no later than 15 days after the deadline.

If they have not paid after 15 days, they are thrown out of the 100-installment scheme and will face the same penalties as anyone else. From January 1, 2018, the precondition for the continuation of the arrangement will be that they have repaid any new debts by the date they were due.

According figures from the Ministry of Finance, debts to the state are growing at a rate of 1 billion euros per month. In the first half of the year, the amount of new taxpayer debt to the state came to 6.8 billion euros.

In order to reduce the growth rate of the debt and increase state revenues, the government, in agreement with its creditors, has moved to coercive measures against state debtors. Plans by the General Secretariat of Public Revenue that will see foreclosures and auctions for 55 percent of debtors are already in progress.

Other measures include:

* Preventive seizures for exceptional cases before they become overdue debts

* Seizure of bank accounts and real estate auctions for 55 percent

* A 10 percent increase in seizures and auctions for debts at customs

* Clearing and confirmation of outstanding traffic fees due

* Automation of debt payments to and from the state

According to data from the Center for the Collection of Social Security Arrears (KEAO), the amount of overdue contributions that it has verified comes to 16.6 billion euros. Its data also show that most of those who registered for the payment scheme have been unable to keep up with their installments. A total of 147,308 signed up for the program but only 50,249 are still paying, and just 8,842 have successfully completed payments.

As regards the 100-installment program, according to KEAO data, 36,053 borrowers out 75,451 – almost 50 percent – dropped out of the scheme during April-June 2016.

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