Greek gov’t mulling changes in out-of-court debt settlement mechanism, Dragasakis says

The Greek government is mulling a package of measures aiming to improve an existing law on out-of-court debt settlement, focused on helping those financially unable to meet their obligations to banks, Economy and Development Minister Yiannis Dragasakis said on Friday.

Speaking in Parliament, Dragasakis said the ministry was committed to examining an expansion of a law protecting borrowers to include those who guarantee loans. The Greek minister acknowledged there were problems in implementing a law on out-of-court debt settlement and stressed that everyone from the government, ministers, banks and other creditors involved need to understand that this tool must be used in order for the mechanism to be successful.

“A joint ministerial decision with a package of changes is ready, some of them are currently being discussed with the institutions in the framework of the fourth review of the Greek programme and I hope that this measure will move into a new stage soon,” Dragasakis said, adding: “We are assessing the results of the out-of-court mechanism and trying to make improvements. With the joint ministerial decision to be issued, we hope we can enter a new phase and have faster results. We will abolish current bureaucracy needed to begin the procedure, reducing this from 23 documents to just two or three.”