Plans for settling new debts

Plans for settling new debts

The Finance Ministry is seeking ways for households and corporations to settle their debts created by the health crisis before they are added to the existing pile of 105 billion euros.

Sources say the measures to support taxpayers who have been unable or failed to respond to their obligations during the ongoing health crisis will be in two main directions: The first will address those who missed payments in the settlement program they had entered due to pandemic-related problems, and the second will concern the introduction of a special arrangement for debts created not only during the lockdown period but also after that.

Minister Christos Staikouras told radio station Real FM that “the debts created during the lockdown must be paid off from April 2021, and in 12 interest-free tranches, or in 24 installments with an interest rate of 2.5%. There is a problem, which I acknowledge, regarding arrears created after the lockdown period due to the economic consequences. We are assessing it to see what we can do. We want to contribute toward citizens not increasing their debts; the state will always be by their side,” he assured.

The options the ministry is considering include the re-entry of those who missed payment scheme obligations into the 120-tranche settlement program or any other plan, and the introduction of a special settlement for obligations amassed during lockdown, which could also be payable as of April 2021 in 12 interest-free tranches or in 24 installments with 2.5% interest.

Bear in mind that taxes and debt settlement tranches in excess of 2 billion euros were frozen alongside economic activity from March until May. These suspended tax obligations must be repaid gradually by end-April, or be entered into a new program starting in May 2021.

However, the large losses corporations have suffered and the fear that a large section of ongoing obligations will end up in the large pool of overdue arrears have made the government consider the extension of the settlement announced, to include debts created after the lockdown too.

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