ECONOMY

Greek gov’t to end protection of most debtors

greek-gov-amp-8217-t-to-end-protection-of-most-debtors

The government is working on measures to accelerate the court hearings of borrowers who have found protection from confiscations under the so-called Katseli law; it is also forming its new bankruptcy code, whose central idea will be “pay up what you owe or go under.”

The country’s creditors have made it clear that the reform of the bankruptcy code is a prior action for them to allow the creation of more fiscal space through the return of profits from Greek bond holdings (SMPs and ANFAs).

The acceleration of processing outstanding cases of the Katseli law, estimated at 80,000-90,000, is also a clear demand of the funds that have acquired or will buy mortgage loans in the context of the extensive securitizations Greek banks are implementing, reaching up to 33 billion euros; half of that concerns loans secured against homes and a significant share of them are protected by the Katseli law.

Among the solutions being examined to speed up the process is the scrapping of witnesses’ oral depositions, to be replaced by written testimonies, though the target of clearing the backlog by 2022, as the creditors are demanding, appears unlikely.