PM Mitsotakis: Out-of-court settlement mechanism improved with six new initiatives, including more people

Athens, Greece.- The out-of-court settlement of outstanding debts to banks and the state offered great relief to tens of thousands of Greek as it was implemented by this government in particular and results show its success, Prime Minister Kyriakos Mitsotakis said in a Facebook post on Tuesday.

“I am therefore particularly happy, as the results of the out-of-court settlement mechanism to date appear to vindicate us: in 2024 we had an 81% rise in out-of-court settlements compared to their number in 2023, wrapping up the year with a total of 28,945 successful settlements, which correspond to initial debts of 9.5 billion euros. At the end of the first quarter in 2025, the number has already reached 33,432 settlements for debts totaling 10.9 billion euros. What does this mean, in practical terms? That nearly 33.5 thousand borrowers achieved a haircut of up to 30% on their debts and a new agreement for their repayment of up to 26 years,” the prime minister said.

Mitsotakis referred to the old out-of-court mechanism law by SYRIZA, institutionalized in 2017, which led to a very low number of settlements (around 2,000) throughout the previous government’s implementation, while private debt reached historical highs. Because of this foolishness, he said, outstanding debts in the financial sector totaled 92.2 billion euros in 2019, while today they have come down to 67.1 billion euros, due to the government’s policy.
“We succeeded in exerting pressure on banks and servicers with a series of measures that obliged them to operate with greater responsiiblity and transparency. And we now move ahead with a new out-of-court settlement mechanism, which is being tabled in Parliament today with six initiatives that will expand the perimeter and revenues of the middle class, which remains steadfastly at the center our policies,” the prime minister said.

New initiatives

PM Mitsotakis briefly described the new, more favorable measures, as follows:

– Doubling the perimeter of eligible debtors with annual incomes of up to 42,000 euros and assets totaling up to 360,000 euros.
– The further protection of borrowers by institutionalizing the obligation of a creditor to have tabled a written proposal of settlement to the debtor before the auction of the latter’s assets.
– The discharge of a debtor who has not come under bankruptcy proceedings, but is entered into the Solvency Register.
– The extension of deadlines so that vulnerable debtors may come under the interim program.
– The extension of the option to settle loans under a state guarantee through a reorganization process.
– A permanent mechanism to compensate injured parties of ‘Aspis Pronia’.

NPL drop

The premier noted that the government’s policies on non-performing loans (NPLs) – through the out-of-settlement mechanism and the ‘Iraklis’ program – allowed banks to significantly reduce NPLs in their portfolios.

“In the third quarter of 2024, the rate of NPLs reached a 4.6% share in bank portfolios, being lower than in the period prior to the crisis. Let me remind you that in 2019, the percentage of NPLs had reached 40.6%! It is also very important fact that Greece is below the European Union average in terms of private debt as a percentage of the GDP,” Mitsotakis said.

“We will continue to fight the battle to support vulnerable incomes, reduce NPLs, and consolidate our country’s financial sector, which must work fairly and with rules, as in every European country,” he concluded.