A meeting by the Government Council for Economic Policy — chaired by Greek Vice President Yiannis Dragasakis — on Wednesday approved a draft bill that aims to improve the public sector, social insurance funds and banks in easing the debt burden faced by businesses facing excessive debts. The ultimate goal of the Greek Economy Ministry’s proposal is to save jobs and safeguard the banking system while ultimately helping in Greece’s financial recovery.
If Greek lawmakers approve the law then it will set a precedent as it will be the first time that participation in debt relief for over-indebted but viable businesses will include the public sector, banks and social security funds. Debt relief could include extensions to the repayment periods, debt haircuts and debt restructuring. Businesses wishing to participate can submit electronic applications via the website for the Special Secretariat for Management of Private Debt. The website will inform them of documents they need to submit in order to be considered for eligibility. Applications will be handled by the coordinator from the justice ministry’s arbitrators’ register.
The main consideration is the definition of what is considered “viable” in business terms. Smaller businesses will be assessed by an automated analysis system but larger businesses will be checked by an independent evaluator to ensure that they are indeed viable.
During the meeting, also attended by Justice Minister Nikos Paraskevopoulos and Labor Minister George Katrougalos, it was stated that the system will be set up in such a way so as to exclude bad debtors from the system and only save businesses that are genuinely viable.
The Greek government showcases the draft law as more functional than the previous law adopted by the ND-PASOK coalition government just two years ago and SYRIZA lawmakers responsible for its creation hope that it will be welcomed by Greece’s EU partners.
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