Greek lawmakers have approved a law that fixes interest at 3% for vulnerable borrowers who restructure their debts and raises the maximum fine on loan-servicing companies tenfold, to 5 million euros ($5.8 million).
By Emmanuella Argiti
The bill, drafted by Finance Minister Kyriakos Pierrakakis, tightens supervision of servicers, the firms that manage bad loans sold off by Greek banks after the country's decade-long debt crisis. Many of those firms act for investment funds, and their treatment of borrowers has become a politically charged issue ahead of elections due in 2027.
The governing New Democracy party passed the bill in principle, and opposition parties voted against it. Several provisions still won broad cross-party support. The amendment setting the 3% rate and the higher fines passed 212-49, with 27 abstentions.
Borrowers who settle their debts through the state's out-of-court mechanism will now pay 3% for the whole repayment period. Under the old rules, that rate lasted only three years for secured debts and then became variable.
Creditors will be barred from pursuing borrowers who keep up with restructured payments. They must also offer a documented settlement at least three months before auctioning a home. The Bank of Greece will supervise servicers, which face annual audits and stricter disclosure rules.
The law also allows overdue tax and social security debts to be repaid in up to 120 monthly installments.
The government withdrew its most contested provision after two days of heated debate. It would have let creditors move to seize assets when a borrower missed more than three installments, without first going to court.