Through seven measures, which will be implemented gradually from early July through mid-fall, the government is attempting to stem the tide of private debt, which exceeds 240 billion euros, posing a “time bomb” for households, businesses, and, by extension, the economy.
Although private debt as a percentage of GDP stands at around 95%—significantly lower than the European average of 121% of GDP— its trajectory is a major concern for the government, with Minister of National Economy and Finance Kyriakos Pierrakakis stating that: “The fact that we are in a better position than the rest of Europe… does not mean that we will not address the issue.”
In this vein, the package of measures included in the omnibus bill of the Ministry of National Economy and Finance (YPETHOO)—which, following consultation, was submitted to Parliament for debate and a vote— offers a new opportunity to at least 1.5 million debtors of the Tax Authority, the EFKA, banks, and servicers to settle their debts in multiple installments, while also providing a safety net for their primary residence and bank deposits.
The most significant of these measures involves the repayment, in 72 installments, of debts owed to the Tax Authority and EFKA that were incurred prior to 2024 (and became due by December 31, 2023).
Applications must be submitted electronically by December 31, 2026, as the online platform is expected to open by mid-July.
A key requirement is that more recent obligations—that is, those incurred after January 1, 2024—must have been paid off or settled and are being paid off regularly. The minimum monthly payment is set at 30 euros, while the principal debt is subject to a fixed annual interest rate of 5.84%.
At the same time, specific compliance requirements are stipulated. The debtor must have filed income tax returns for the past five years, provided the relevant filing deadline has passed, must not have been convicted with a final judgment for tax evasion or smuggling, and must have settled any other overdue debts not covered by this arrangement.
As long as the arrangement is adhered to, significant benefits are provided, such as tax compliance status, suspension of enforcement measures, and suspension of criminal prosecution for debts owed to the State.
Interventions
| Intervention | Eligibility & Limits | Basic Terms & Installments |
|---|
| 1. New 72-Installment Payment Plan | Debtors with outstanding debts to the Tax Office and EFKA that became due by December 31, 2023. | • Up to 72 monthly installments.
• Minimum installment: 30 euros.
• Fixed annual interest rate: 5.84%.
• Prerequisite: Full payment or settlement of debts incurred after January 1, 2024.
• Applications must be submitted by December 31, 2026 (the platform is expected to open in mid-July).
• Benefits: Tax compliance status, suspension of enforcement measures and criminal prosecution. |
| 2. New Framework for the Out-of-Court Settlement Mechanism | Individuals and legal entities with debts to the State and social security funds. Reduction of the minimum debt threshold to 5,000 euros (from 10,000 euros). | • Up to 240 monthly installments for the State/Social Security Funds.
• Up to 420 monthly installments for banks/servicers.
• Fixed interest rate of 3% for debts owed to the State.
• Automated settlement proposal via the platform’s algorithm.
• Consent is required to waive banking and tax confidentiality.
• Takes effect one month after the law is published in the Government Gazette. |
| 3. Protection of Primary Residence | Debtors participating in the out-of-court settlement mechanism. | • Option to separate the primary residence from the rest of the assets (effective September 21, 2026).
• The arrangement focuses solely on the value of the primary residence, without necessarily taking into account the total value of the assets.
• Debt “haircut,” lower monthly payments, and repayment in up to 420 installments (35 years) through the liquidation of other assets. |
| 4. Real Estate Acquisition & Leaseback Agency | Vulnerable debtors at risk of losing their primary residence to foreclosure (approximately 15,000 households). | • The Agency (with “Christofferson, Robb & Co., LLC” as the Interim Contractor) is expected to become fully operational in the fall.
• Option to remain in the primary residence as tenants for 12 years, at a low rent.
• Right to repurchase the property at the end of the period.
• Until the program becomes fully operational, the Interim Program remains in effect, with a suspension of foreclosures and a government subsidy of up to 210 euros. |
| 5. Loans in Swiss Francs | Borrowers with loans in Swiss francs. | • Extension of the protection program until September 30, 2026.
• The goal is to permanently convert the loan to euros.
• Fixed interest rate and fixed monthly payment.
• Elements of fairness and a “haircut” based on income. |
| 6. Exemption Threshold | All debtors with debts to the government and banks. | • Increase in the amount of bank account deposits exempt from seizure to 1,600 euros (from 1,250 euros).
• This represents a 28% increase, exceeding cumulative inflation. |
| 7. Frozen Accounts | Taxpayers and businesses with frozen accounts due to overdue debts. | • Option to “unfreeze” accounts by paying 25% of the total debt.
• Payment plan for the remaining amount.
• This option is available only once. |
Out-of-Court
The new framework of the Out-of-Court Mechanism for debts owed to the State and social security funds allows debtors (both individuals and legal entities) with debts exceeding 5,000 euros to participate, thereby broadening access to a tool that, until now, applied only to debts exceeding 10,000 euros.
Through the out-of-court settlement, debts can be repaid in up to 240 monthly installments at a fixed interest rate of 3%. In fact, for debts owed to banks and servicers, the number of installments can reach up to 420, with the final repayment proposal generated automatically through a special algorithm on the platform.
Unlike the 72-installment arrangement, the out-of-court mechanism takes into account the debtor’s overall financial situation.
It examines income, assets, bank deposits, other obligations, and the debtor’s actual ability to repay. For this reason, participation requires consent to waive bank and tax confidentiality. The advantage of this process is that, in certain cases, it may provide not only for long-term repayment but also for the partial write-off of interest, surcharges, or even part of the principal debt.
The arrangement takes effect one month after the law is published in the Government Gazette.
Primary Residence
Through the out-of-court mechanism, effective September 21, 2026, debtors will be able to separate their primary residence from the rest of their assets. The debtor may exclude their home from the liquidation process, thereby securing a “debt haircut,” a lower monthly payment, and repayment in up to 420 installments (up to 35 years) in exchange for the liquidation of their other assets.
The omnibus bill introduces new targeted procedures to protect primary residences.
Unlike the current framework, which takes into account all debts and assets, the new procedure focuses solely on the value of the primary residence, without necessarily considering the borrower’s total assets.
Real Estate Agency
The Real Estate Acquisition and Leaseback Agency is expected to become operational this fall. The financial entity “Christofferson, Robb & Co., LLC” has been selected as the provisional contractor for the Real Estate Agency; once it submits the award documentation and these are deemed complete, will be declared the final contractor and invited to sign the Concession Agreement, which will then be submitted to Parliament for ratification.
This constitutes the final stage of the process for selecting the strategic investor who will take over the management of the Agency, which will give approximately 15,000 households at risk of losing their primary residence to foreclosure the opportunity to continue living there while paying low rent.
Until the Agency is fully operational, the Interim Support Program for Vulnerable Debtors remains in effect; under this program, foreclosure proceedings on the debtor’s primary residence are immediately suspended, while at the same time a government subsidy of up to 210 euros is provided toward the loan installment.
Swiss Franc
For loans denominated in Swiss francs, the borrower protection program has been extended until September 30, 2026. According to data from the Ministry of Economy and Finance, approximately 14,000 borrowers have expressed interest and have applied to join the program.
Exemption Threshold
The exemption limit for deposits in bank accounts is increasing from 1,250 euros to 1,600 euros for all debts owed to the government and banks.
The €1,250 limit had been “frozen” since 2015, when it was established under the SYRIZA government. The new limit of €1,600 represents a 28% increase, exceeding the cumulative inflation rate for the period (20.8%).
The measure essentially brings deposit protection in line with current economic conditions and the increased cost of living.
Frozen Accounts
Taxpayers and businesses with frozen accounts due to overdue debts will be able to unfreeze them by paying 25% of the total debt and arranging a payment plan for the remaining amount. This option is available only once and is intended to maintain a minimum level of liquidity to cover operational needs, particularly for small and medium-sized businesses and self-employed professionals.