Alarm bells over private debt as out-of-court settlement data reveals strain
New data reveals a significant strain on the Greek economy due to rising private debt, with most undergoing restructuring being tied to businesses.Summary
A recent report indicates that private debt remains a substantial problem for the Greek economy, despite a record high in out-of-court settlements in November. Total debts in the out-of-court mediation process reached €55.22 billion, with the majority – €32.83 billion (59.5%) – linked to individuals involved in business activities. A concerning 91.6% of this debt is already delinquent or has defaulted.
Furthermore, a large portion of the debt is substantial, with debts exceeding €1 million accounting for €31.2 billion (56.5%) of the total. This suggests that simple restructuring is often insufficient for repayment. Creditors frequently reject restructuring requests, with €4.49 billion (31.38%) of cases denied due to borrowers’ inability to repay even with write-downs and extended terms.
The report paints a picture of deeply distressed debt with limited potential for viable new arrangements, as delinquencies continue to increase. Rejection reasons also include unsuitable mediation cases, poor payment history, broken agreements, and lack of participation from all liable parties, highlighting the complexity and severity of the private debt situation.
(Source：Athens Times)