Greek Finance Minister Christos Staikouras is pressuring banks and servicers to intensify efforts towards finding solutions for the settlement of non-performing loans, both through out-of-court settlements and through bilateral agreements.
The finance ministry, although it acknowledges that the percentage of loan settlements has increased significantly, believes that the final number of settlements still lags relative to ministry expectations. The issue was discussed during a meeting on Thursday, with the finance ministry urging banks and services to accelerate efforts towards this goal.
Acording to sources, banks and services do not seem keen to seek out-of-court settlements since they fear that any haircut could be larger than expected. The finance ministry believes that both the out-of-court and bilateral deals are the only right path towards reducing private debt and avoid foreclosures and auctions.
According to official figures collected by the Public Debt Management Secretariat, banks reject debt settlements at a rate of 67%, while services at a rate of 34%. The out-of-court settlement offers repayment deals of up to 240 tranches for debt to the state and up to 420 tranches for debt to banks. The finance ministry is determined to push ahead with the project of debt settlements.