State to pay at rate it charges

The State must repay its debts at the same rate of interest it imposes on ordinary Greek debtors – instead of at a 50 percent discount, as is current practice – according to a precedent-setting decision by a court in northern Greece that was made public yesterday. The Ioannina administrative court accepted a six-year-old suit by a State-employed agriculturalist who, having been reinstated in his job after being unfairly sacked, sought the payment of two years’ outstanding pay at an 11.25 percent rate of interest, exactly the same rate imposed on ordinary citizens. Legal experts hailed the decision as a benchmark ruling. «This is a most important decision, as it overturns current jurisprudence,» Angeliki Papapanayiotou-Leza, secretary-general of the Association of Administrative Judges, told Kathimerini. «According to extant legislation, when a citizen owes money to the State he is charged interest for overdue payment at a rate that now stands at 11.25 percent – while at one point it had even reached 40 percent. But when the State owes money to a citizen, the interest rate is 6 percent, under a decree dating to 1944.» The court found that this constituted unfair and preferential treatment on behalf of the State, and contravened the Constitution as well as the European Convention on Human Rights and the International Covenant on Civil and Political Rights. «I consider this a brave decision that honors Greek justice,» Papapanayiotou-Leza said. «I believe it will activate citizens, who will now be able to use it in court [as a precedent].» The issue, however, is expected to be debated at a higher level, as the State is bound to appeal to a higher administrative court.

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