Setting of overdue loans with several doses and partial removal of debt

In an attempt to ease the burden on households but also to stop the phenomenon of continuing growth in loans, the Greek government is preparing a new model for loan arrangements, which is expected to be ready in autumn and will be equivalent to that applied in Ireland. As envisaged in the new memorandum, the Greek government, banks and Troika are working towards a new model with lower doses for borrowers and debt deletions in order to give a breather to thousands of households that cannot meet their obligations."

Consumer organizations are also involved in the study and design of this new plan. Based on the current situation in Ireland there will be a list of necessary living expenses of households which will include monthly and inflexible costs for food, medical care, electricity, heating, etc. Another list will determine the criteria of debtors to be deemed as cooperative borrowers, mainly from sincerity to the bank for their revenue, their assets, etc.

Based on these data the bank will not be able to designate borrowers as uncooperative under non-transparent criteria and refuse to restructure their debt. These terms are intended to have a properly structured framework by which banks and borrowers can negotiate towards a debt restructuring with lower doses. Going one step further, some debts can also be deleted if the bank finds it cannot implement the above terms, or that it cannot receive a part or the whole of a debt.

There are many arrangements to the extent that banks and borrowers will benefit both. Maximos Mansion says that a lot of banks agree with such practices and emphasizes that as long as banks and borrowers do not settle their disputes they are delaying the restart process of the Greek economy.