An amendment by Greek National Economy and Finance Minister Kyriakos Pierrakakis, providing relief to more than 100,000 borrowers covered by the Katseli Law, has been submitted to Parliament and is expected to be voted on during Wednesday evening’s plenary session.
The legislative provision concerns the “regulation of the method for calculating interest on payments under Law 3869/2010,” widely known in Greece as the Katseli Law, a household insolvency framework introduced during the country’s financial crisis.
The amendment provides that interest will be calculated on the monthly instalment set by the court, not on the total outstanding principal. It also extends the effect of a recent Supreme Court ruling to all active repayment plans, applies relief retroactively for borrowers, reduces monthly instalments and the final balance owed, and allows debts to be repaid sooner.
The cost of the arrangement is estimated at about €700 million, to be shared between banks and the Greek state. Banks are expected to absorb around €200 million, while the state will cover approximately €500 million in relation to guarantees under the “Hercules” asset protection scheme, the state-backed programme used to help Greek banks reduce non-performing loans.
The amendment was submitted to a bill containing measures to address the energy crisis and strengthen citizens’ disposable income. It is expected to be voted on in the plenary session of Parliament late on Wednesday evening.
According to the accompanying report by the General Accounting Office, the provision sets out the method for calculating interest on payments under Article 9, paragraph 2 of Law 3869/2010, in line with Decision No. 6/2026 of the Plenary Session of the Supreme Court.
Specifically, it clarifies that the interest due is calculated on the monthly instalment set by the court and only for the period between two consecutive payments.
It also regulates the management of active repayment plans in cases where borrowers have already paid amounts exceeding the interest terms specified for their debt. Under the provision, this may lead to a reduction in the total number of remaining instalments and in the outstanding balance. In settlement agreements that have already been completed, or where the conditions for declaring them void have been met, any excess amounts will not be recovered.
Credit institutions will also be required to transfer to legal entities that have acquired claims linked to active payment plans, under Law 4649/2019, any excess amounts they have collected, once the acquirer submits a relevant request.
The amendment also sets out the method for calculating monthly payments under debt settlement plans drawn up pursuant to Law 4605/2019 and Law 4738/2020.
Earlier on Tuesday, Pierrakakis referred to the measure in a social media post accompanied by a video of his remarks at the fifth Cantina Academy conference, titled “Epirus: The Roots and Future of Authenticity,” organised by Proto Thema and Cantina Magazine.
“The court ruling is not forcing us to do this; we are coming forward and doing it on our own,” the minister said.
“Smaller instalments, less burden, faster repayment. This is what the new loan regulation under Law 3869/2010 provides for,” Pierrakakis wrote in his post. “Our goal remains to give citizens some breathing room, especially those who need it most.”
Explaining how the new regulation will work, the minister said the amendment first takes the Supreme Court ruling and applies it universally to everyone with an active debt settlement plan.
“For those with active repayment plans, we are saying that whatever they have already paid will be taken into account under this specific decision and the amendment we are proposing, and that these changes will apply retroactively,” he said.
“This is not something the court ruling requires of us. We are taking this initiative on our own,” he added, stressing that the measure will cover more than 100,000 citizens.
Pierrakakis also gave a numerical example. He referred to a borrower who, in January 2024, had an outstanding balance of €144,500. Under the previous calculation method, the borrower would have paid a monthly instalment of €731 for 300 months. Under the new method, the monthly instalment falls to €483, consisting of €482 in principal repayment and just €1 in interest.
According to the minister, if the borrower had been paying €731 from January 2024 until June 2026, they would have overpaid for 30 months by about €7,440. That amount would then be deducted from the remaining instalments. Instead of having 270 instalments left to pay, the borrower would ultimately pay 255 instalments of €483.
Pierrakakis said that, under the previous method, the borrower would have paid €74,852 in interest. Under the new calculation, the interest would fall to €411.
Responding to opposition criticism, the minister said the government viewed the measure as “a duty of political responsibility” and not as an opportunity for political exploitation.
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