Expanding extrajudicial mechanism’s scope

Expanding extrajudicial mechanism’s scope

The Economy Ministry appears to have agreed with the country’s creditors on the inclusion in the extrajudicial debt settlement mechanism of individuals who are partners of enterprises in trouble.

The negotiations, which are set to continue today, will further examine whether the debts to be settled in this way will include both debts to banks and the state, or if the process will only concern debts to the tax authorities and the social security funds, as is the case today with freelance professionals.

The expansion of the mechanism’s scope is aimed at including additional categories of debtors, as so far the results of the system’s operation have not met the original expectations in terms of tackling the bad loans problem.

There has been a series of proposals in this direction that the creditors have provisionally approved and are expected to rubber-stamp today. They concern the inclusion in the extrajudicial mechanism of debts created last year, the reduction in the number of documents required to apply, and the obligation of banks to issue a sufficient explanation if they reject a solution proposed by a debtor.

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