The Federation of Hellenic Enterprises (SEV) on Thursday presented its proposals on the management of non-performing loans, intervening in a negotiation on the issue between the Greek government and the institutions, currently underway.
In a weekly bulletin on economic developments in the country, SEV noted that an existing legislation on insolvency was characterized by lack of coordination, overlaps and often mazy and inefficient procedures. The Federation said that the existing framework offers the flexibility to strategic bad debtors to prolong procedures discrediting assets and creditor rights. SEV proposes the withdrawal of all hurdles in the write off of debt to the private and public sector that cannot be collected and their restructuring when a case is viable with respect to healthy competition.
SEV proposals include, among others: Clear and common limits of pre-bankruptcy and bankruptcy procedures for individuals and enterprises, clear and common criteria for restructuring or clearing with the aim to save value, involvement of justice only when it is absolutely necessary, procedures for small- and medium-sized enterprises should not deviate from general principles.
The Federation also noted three gaps in existing legislation that need to be fulfilled: The danger for civil servants and bank executives approving the write off of liabilities to face legal actions, defining the responsibilities of new managements installed on an enterprise for pending liabilities to the state and tax impact of writing off liabilities.
SEV said that a first estimate on the country’s GDP for the third quarter of 2016 was very positive and that an official forecast for a -0.3 pct GDP rate this year was very likely to be achieved. At the same time, deflation was slowing down and budget revenues grew strongly helped by higher taxes and a policy of containing cash payments depriving the market from necessary liquidity and helping in the creation of rising primary surpluses.