Mitsotakis: Advancing the New Out-of-Court Settlement with Six Initiatives Expanding Scope to Middle-Class Incomes

“The out-of-court settlement mechanism for restructuring debts to banks and the state has been a key goal for our government since 2019. At that time, tens of thousands of our fellow citizens were trapped in non-performing loans and overdue obligations, with no long-term solution or economic activity prospects. Our goal was to provide these individuals with a way to relieve their debt burdens through an automated and fair system, allowing them to bring order to their finances and take control of their lives,” Kyriakos Mitsotakis stated in a Facebook post.

“I am particularly pleased because the results of the out-of-court settlement mechanism so far have proven us right: In 2024, we saw an 81% increase in settlements compared to 2023, closing the year with a total of 28,945 successful agreements, corresponding to an initial debt amount of €9.5 billion. By the end of the first quarter of 2025, this number has already risen to 33,432 settlements, covering total debts of €10.9 billion. What does this mean in practice? That nearly 33,500 borrowers have achieved debt reductions of up to 30% and new repayment arrangements for up to 26 years,” the Prime Minister continued.

He added: “It is telling that under the previous out-of-court settlement law introduced by SYRIZA in 2017, only around 2,000 agreements were reached over several years, while private debt had already reached historic highs. Due to this inaction, by 2019, overdue obligations in the financial sector totaled €92.2 billion. Today, they stand at €67.1 billion, as a result of our policies.

We successfully pressured banks and loan servicers with a series of measures, compelling them to act with greater responsibility and transparency. Now, we are moving forward with the new out-of-court settlement mechanism, which is being submitted to Parliament today, incorporating six new initiatives that expand its scope to include middle-class incomes—a core focus of our policies.”

Mitsotakis outlined the following new favorable measures:

• Doubling the eligibility scope to include debtors with annual incomes up to €42,000 and assets up to €360,000.
• Enhanced borrower protection by requiring creditors to submit a written settlement offer before initiating foreclosure proceedings.
• Debt discharge for non-bankrupt debtors recorded in the Solvency Registry.
• Extended deadlines allowing vulnerable debtors to access interim support programs.
• Inclusion of state-guaranteed loans in restructuring plans through the resolution process.
• A permanent compensation mechanism for victims of the “Aspis Pronoia” insurance scandal.

“Thanks to our policies on non-performing loans—both through the out-of-court settlement mechanism and the ‘Hercules’ program—banks have significantly reduced their portfolios of non-performing loans,” Mitsotakis emphasized.

He further stated: “In the third quarter of 2024, the share of non-performing loans in bank portfolios fell to 4.6%, lower than pre-crisis levels. To put this in perspective, in 2019, this percentage was 40.6%! Equally important, Greece is now below the EU average in terms of private debt as a percentage of GDP. We will continue fighting to support vulnerable incomes, reduce bad loans, and restore stability to our financial sector—ensuring it operates with fairness and regulations, just like in every European country.”

Mitsotakis: Advancing the New Out-of-Court Settlement with Six Initiatives Expanding Scope to Middle-Class Incomes