We want an out-of-court mechanism to succeed, Greek banks say

“We want this law to succeed,” Charoula Apalagaki, secretary-general of Hellenic Bank Association said on Thursday, addressing an event on the out-of-court mechanism to restructure corporate debts, organized by social groups and the Union of Greek Chambers.

In her address, Apalagaki emphasized on the need debtor companies applying with the platform -to be launched in August 3- to declare in full honesty all their debts to the banking system and to third parties (state, pension funds, etc) in order to have an assessment of the company’s viability. An agreement by all interested parties will give the opportunity to an enterprise to become viable and to regain access in new funding. She noted that companies approaching the law with not honest intentions should better stay out of procedures. She urged all parties to adhere to timetables set by the law and underlined that banks are willing to cooperate and that no one should unjustifiably win from this procedure.

A non-performing loan should not separate banks and borrowers, but should be a point of cooperation to resolve the problem, Apalagaki said. He added that banks were willing to work towards resolving any problems arising in the future and expressed the hope not to lose valuable time in courts.

Theodore Kalantonis, deputy CEO in Eurobank said the law offered the possibility to have a full picture of corporate debts to the banking system and third parties and of their tax and financial position in general, allowing for a really viable solution. He stressed that zombie-companies should be closed down and emphasis should be given to enterprises facing problems but could become viable again. He dismissed a notion that banks were allergic to the word “haircut” of loans. “We are making haircuts for a long time. Several of loan restructuring agreements include a haircut,” he noted. Kalantonis said that banks will be ready by August 3 when the out-of-court mechanism platform is scheduled to be launched.

Periklis Kitrilakis, managing director in Alpha Bank, Panagiotis Koumentakos senior manager in Piraeus Bank and Constantinos Bratos, deputy managing director in National Bank, all noted their banks readiness and intention to contribute to the benefit of all interested parties in the successful implementation of the law.