Greece tables draft legislation expanding “Hercules” program to reduce NPL

The Greek government has just tabled in Parliament a draft law seeking to further reduce non-performing loans (NPL) in banks’ portfolios by expanding the “Hercules” programme.

The draft legislation envisages measures to introduce greater transparency, more information and respect of debtors’ rights for servicers, modernise an out-of-court mechanism and expand protection for vulnerable debtors, improving the operating framework of a sale and leaseback agency, introducing measures to boost competition, such as loan offering from non-banking agencies, and expanding transactions through the IRIS system.

National Economy and Finance Minister Costis Hatzidakis said that the government’s intervention for banks and loans combined the goal of financial restructuring and the protection of vulnerable debtors with a series of modern and fair solutions. Servicers will operate under new and stricter transparency rules, ensuring debtors are given more information. The out-of-court mechanism becomes simpler, while the expansion of the Hercules programme will operate for the benefit of the banking system. At the same time, competition in the banking system becomes more intense through initiatives such as the ability of non-banking agencies to offer housing and business loans. The Greek economy has proven to be resilient and will move even higher in 2024, while dealing with the outstanding private debt will definitely contribute towards this direction, he said.

The expanded Hercules programme, following an agreement reached with the European Commission, will have a guarantee offer ceiling of up to €2 billion and will last until December 31, 2024. The Greek state has offered guarantees worth €18.7 billion in the previous two phases of the programme, helping to reduce the stock of NPL held by banks from 40.6% in December 2019 to 8.6% in June 2023.

Original Story: Hellenic News of America |HNA
Photo: Photo by Jonte Remos in FreeImages
 Prime Yield