Greece’s Ministry of National Economy and Finance proposes fixed 3% restructuring rate for eligible debtors and EUR 5 million servicer fine cap

Greece’s Ministry of National Economy and Finance proposed two amendments to the bill on private debt and credit servicers to reduce restructuring costs for qualifying borrowers and increase penalties for servicer violations. The measures would fix annual interest at 3% throughout eligible debt restructurings and raise the maximum fine imposed by the Bank of Greece tenfold, from EUR 500,000 to EUR 5 million. The interest rate measure would cover certified vulnerable debtors and debtors meeting the statutory eligibility criteria under the out of court restructuring mechanism. A fixed rate of 3% would become a mandatory contractual term for debts owed to financial institutions, regardless of collateral or the category of financial institution, and would apply to payments from December 1, 2026. Currently, secured debt carries an initial rate of 3% and unsecured debt 4%, before switching to floating rates after three years. The amendment would remove that subsequent exposure to variable interest rates for the specified borrowers. The higher supervisory fine cap would cover violations including deficiencies in governance and internal controls, borrower treatment and complaints handling. Breaches of contractual and outsourcing requirements would also fall within its scope. These penalties are separate from the bill’s proposed fines of EUR 50,000 to EUR 500,000 per borrower, imposed by the General Secretariat for the Financial Sector and Private Debt Management. Those fines would address collection action against borrowers who are current on payments or have missed instalments because their creditor or servicer failed to provide necessary information.