The economy ministry on Tuesday unveiled a long-expected “road map” for the out-of-court settlement of debts and arrears by over-burdened businesses, with the draft proposal now needing creditors’ approval in order to proceed.
The initiative attempts to modernize the framework with which arrears to credit institutions, the state, pension funds and suppliers are settled outside Greece’s creaky judicial system – where cases take years to be finally adjudicated.
Under the draft framework, a primary condition cited for a business to be eligible will be at least 20,000 euros or more in arrears, with a restructuring of debts achieved with the approval of three-fifths of creditors. Under the draft legal framework, the entire arbitration process will be managed by a third party mediator.
While the draft law was unveiled from public discussion and debate, there are, nevertheless, four “asterisks”, as some details apparently have not been previously discussed with Greece’s institutional creditors.
According to reports, the latter want a “write-off” of arrears related to the non-payment VAT remittances; an earlier date for verifying arrears, prior to Dec. 31, 2016; an increase in the minimum level of arrears for eligibility in the process, which the government has pegged at 20,000 euros; and, finally, for the law to expire before Dec. 31, 2018, as now cited in the draft.
