Low score for out-of-court debt settlement mechanism

Low score for out-of-court debt settlement mechanism

Just 70 corporations and 130 self-employed individuals have successfully regulated their outstanding debts to banks and the Greek state through the out-of-court settlement mechanism in the first year of its operation.

The latest available data reveal that out of the 34,000 corporations and 15,000 self-employed individuals that are at various stages of collecting the documents required to apply, no more than 1,350 corporations and 1,650 professionals have successfully completed their applications to commence the process.

The efficiency of the extrajudicial mechanism as an instrument for the streamlining of overindebted corporations will be tested this September, when the companies’ genuine interest in reaching an arrangement for their arrears will be revealed, following recently introduced improvements.

The most crucial of those amendments concerns the inclusion in the mechanism of debts created last year too. This addition is seen as vital for fathoming the pool of enterprises that can use the extrajudicial settlement, because it will also allow for the recalculation of the total arrears of each enterprise on a realistic basis.

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