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Economy

Greece Squeezes Banks, Debt Collectors to Settle Bad Loan Pile

ATHENS – Greece’s Finance Minister Christos Staikouras wants banks and collection agencies to find ways to settle a mountain of bad loans from people who can’t pay, although some businesses have avoided the hounding.

He wants more out-of-court settlements as debt collectors making incessant calls to debtors threaten them with being sued even if they can’t pay among other aggressive techniques.

The number of bad loans that mounted during the nearly 2 ½ years of the COVID-19 pandemic that saw many people out of work for months and businesses closed temporarily has grown faster than settlements.

Sources not named told Kathimerini that banks and servicers are resistingthe call and prefer taking people to court to get more money, believing a settlement will bring them less in profits.

But with Prime Minister Kyriakos Mitsotakis facing a re-election campaign in 2023 the government doesn’t want the spectacle of foreclosures and auctions of property as homes no longer are protected from confiscation.

Figures collected by the Private Debt Management Secretariat said that banks reject 67 percent of settlement offers while collectors turn them down 34 percent of the time, wanting instead to go take people to courts backed up.

The out-of-court settlement offers repayment deals of up to 240 installments for debts to the state and up to 420 installments for debts to banks and the Finance Ministry is said keen to keep pushing for them.

 

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