FinMin: Debt settlement mechanism progressing, accelerated effort required

The Greek government is accelerating efforts to implement a new out-of-court mechanism for private sector debt settlement, with loans worth more than 20 billion euros currently at an advanced stage of the arbitration mechanism, of which three billion euros have been submitted to cover 6,500 applications, Finance Minister Christos Staikouras said on Wednesday.

Speaking to reporters during a news conference with Finance Ministry special secretary for private debt management Marialena Athanasopoulou, Staikouras said the pace of completion is moving rapidly over the past few weeks.

“Building on intense efforts by all actors in the last few weeks, more than 200 applications were completed on a weekly basis, with an average debt level being more than 200 million euros. So far, 425 applications are successful, of which 288 are by banks and services and 137 by the state. These debt settlements offered a haircut of up to 33 percent, while the average duration of payment settlement is 253 months,” he said.

Staikouras added that some 1,200 applications are still pending, accounting for more than one billion euros in debt. He stressed that the average rate of approval was 46 percent, which means there’s significant room for improvement by creditors.