Greece’s government is set to unveil an out-of-court settlement for billions of euros in home loans denominated in Swiss francs, aiming to ease the burden on tens of thousands of borrowers hit by sharp currency swings, two sources have told Reuters.
More than 50,000 Greeks took out Swiss franc mortgages in the mid-2000s, drawn by lower interest rates at the time.
Many now face far higher repayments after the Swiss franc surged against the euro.
Thousands of borrowers have taken the issue to court, seeking compensation, with final rulings still pending.
Under the proposed scheme, which is expected to be announced in the coming days, remaining loan balances would be converted into euros with a discount of between 15% and 50%, depending on borrowers’ income, a senior government official said on condition of anonymity. The plan was initially due to be presented over the summer but was finalized only in recent weeks due to technical complexities.
The settlement would apply on a voluntary basis and provide a favorable exchange-rate conversion for outstanding loans.
The total cost for Greek banks is estimated at between 400 million and 600 million euros, depending on participation levels, according to the government official and a banking sector source cited by Reuters.
Finance Ministry data show that about 37,000 Swiss franc mortgages remain outstanding. Of these, roughly 20,000 are still held by banks, while around 17,000 are classified as nonperforming loans managed by credit servicers or securitized under the state-backed Hercules bad-loan reduction program.
The move comes as the government seeks to address long-running household debt issues and contain social pressure over housing costs, while banks continue to clean up balance sheets after years of financial crisis.