Greece’s Ministry of National Economy and Finance published remarks by Minister Kyriakos Pierrakakis to Parliament’s Standing Committee on Economic Affairs outlining two proposed additions to a bill protecting borrowers. The measures would establish a fixed 3% interest rate for vulnerable and eligible borrowers using the extrajudicial debt settlement mechanism and increase the maximum supervisory fine for loan servicers tenfold, from EUR 500,000 to EUR 5 million. The 3% rate would apply throughout agreements restructuring debts owed to financial creditors, regardless of collateral or creditor category. It would be a mandatory contractual term applicable to payments from Dec. 1, 2026. Currently, secured debts carry a 3% rate and unsecured debts a 4% rate for the first three years, after which rates become variable. Eligibility extends beyond vulnerable borrowers. For example, a family with three children and annual income of up to EUR 42,000 could qualify if it meets the prescribed asset criteria. The higher fine ceiling would apply to penalties imposed by the Bank of Greece for serious servicer breaches, including inadequate borrower protections, deficient complaints handling and violations of conduct or supervisory obligations. These penalties are separate from fines already included in the bill of EUR 50,000 to EUR 500,000 per borrower for specified collection violations. Pierrakakis also confirmed the withdrawal of a provision intended to simplify implementation of debt settlements agreed directly between borrowers and creditors. Corresponding arrangements under the extrajudicial mechanism would remain, citing its prescribed assessment rules and borrowers’ ability to challenge inaccuracies before accepting a proposal.
Greece’s Ministry of National Economy and Finance proposes fixed 3% debt settlement rate and EUR 5 million servicer fine ceiling
In a parliamentary committee speech, Greece’s Minister of National Economy and Finance Kyriakos Pierrakakis outlined proposals for a fixed 3% rate throughout eligible extrajudicial debt settlements and a tenfold increase in the Bank of Greece’s maximum fine for loan servicers to EUR 5 million. The interest measure would cover vulnerable and eligible borrowers, regardless of collateral, for payments from Dec. 1, 2026. The higher supervisory ceiling would be separate from fines already in the bill of EUR 50,000 to EUR 500,000 per borrower for specified collection violations.