The anxiety of borrowers repaying loans restructured under the Katseli Law continues, as servicers have decided to ask the Supreme Court to interpret Plenary Session Decision 6/2026 in order to clarify exactly how interest will be calculated.
Sources at the servicing companies clarify to Euro2day.gr that this extension will be interest-free for borrowers. In other words, until the Supreme Court issues an interpretive decision, servicers will collect from debtors only the installment specified by the court ruling, without any interest charges.
The same sources explain that servicers have reached this decision to file a new appeal with the Supreme Court after taking all aspects of the problem into account:
1. If the restructured loans effectively become interest-free, with interest calculated on the monthly installment, there is a risk that the Greek government—which has provided guarantees for the securitizations under the “Hercules” plan—or funds that have invested in securitized loans may turn against the servicers in the future.
“We cannot bear the burden of this risk,” emphasize executives at the management companies, noting that it has been calculated that the interest lost on securitized loans exceeds 900 million euros.
2. If servicers impose interest on restructured loans using the formula promoted by financial sector lawyers— that is, with a progressive increase in the interest calculation base each month, it is certain that borrowers and consumer associations will turn against the servicers, opening a new cycle of litigation.
Moreover, the same sources on the servicers’ side note that the legal opinion that “circulated” regarding the method of calculating interest with a monthly increase had not been adopted by the servicers’ legal teams, but originated from the banks. “We understand this interpretation from a technical and legal standpoint, but we do not adopt it,” note executives from debt collection companies.
Lawyers representing borrowers point out that it is highly unusual to request an interpretation of a Plenary Session decision from the Supreme Court, and it is not even certain that the Supreme Court will be willing to grant this request. In any case, however, the fact that servicers will not demand payment of interest for the period until the interpretation of the decision is clarified serves to ease tensions, as they emphasize.
The return of interest… out the window
It should be noted that, as Euro2day.gr has reported, the interpretation of the Supreme Court’s decision provided by legal experts in the financial sector imposes significant interest burdens on borrowers.
According to this interpretation, the interest burden does not remain low and stable, but increases linearly over time, creating an arithmetic progression. The result can be more easily understood through an example of a settlement involving a principal amount of 120,000 euros, to be repaid over 240 months (20 years) with an installment set by the court at 500 euros:
- If the interest is calculated monthly at a fixed rate of 500 euros with an annual interest rate of 3%, the borrower will be charged only 300 euros in interest over the twenty-year period; in other words, the arrangement will effectively be interest-free.
- According to the banks’ interpretation, interest will increase over time. The first installment will incur €1.25 in interest; by the 100th installment (interest accrued over 100 months), the interest will rise to €125 (€625 for the total installment including interest), and the final installment (the 240th) will raise the interest to €300 (compounded over 240 months), “inflating” the monthly payment to €800.
- The overall result is that the borrower, instead of paying a minimal amount of interest (e.g., 300 euros for the entire twenty-year period), will be required to pay the sum of an arithmetic progression. The total interest in this case would amount to 36,150 euros on top of the principal of 120,000 euros. In other words, this results in an increase of 11,950% (!) compared to the interest they would pay using the “simple” monthly calculation method. The total interest amount (€36,150) is not far from the €39,724 he would pay in the same example if the interest were calculated on the total outstanding principal, based on the “classic” banking method.