The Minister of National Economy and Finance, Kyriakos Pierrakakis, defended this measure from the floor of Parliament.
Responding to criticism from the opposition, the minister emphasized that the government did not treat the issue as a matter for petty political confrontation, but as an obligation toward citizens who found themselves trapped in protracted legal proceedings and uncertainty.
“Some saw the borrowers’ distress as an opportunity for political exploitation. We saw it as a duty of political responsibility,” he noted, seeking to highlight the philosophy behind the government’s intervention. As he emphasized, the government chose not to postpone the problem indefinitely or limit itself to narrow legal interpretations, but to move forward with a comprehensive legislative solution.
“The government has decided not to postpone the issue of the Katseli Law to the future. Not to hide behind legal interpretations. We are providing a clear solution to the problem,” he noted, emphasizing that the measure provides for universal application, retroactive relief, and substantial debt relief for more than 100,000 borrowers.
The full speech by the Eurogroup President follows:
“Ladies and gentlemen,
There are bills that regulate specific aspects of day-to-day administration, and there are bills that reflect a comprehensive policy vision of how the economy, the state, and ultimately society itself should function.
The omnibus bill we are discussing today belongs to the second category, because behind its individual provisions lies a unified rationale of Kyriakos Mitsotakis’s government: that economic policy must
- be able to simultaneously resolve outstanding issues from the past,
- support those who are under the greatest pressure in the present,
- create the conditions for more investment and higher incomes in the future, and
- protect the rule of law against illegal activities that erode the economy and society.
This is precisely what we are striving to achieve today.
The starting point can only be a wound that remained open for sixteen full years: Law 3869 of 2010—the so-called Katseli Law.
This law was passed during an extremely difficult historical period, at the height of the economic crisis, with the aim of protecting households that found themselves in genuine distress. And I say “with the aim,” because I in no way question the intention.
What I do question, however, is the outcome.
Because, ultimately, the Katseli Law neither protected all those who were truly in need with the necessary effectiveness, nor did it prevent strategic defaulters from abusing the framework—those who found a way to “hide” behind years of judicial delays.
We all know the result.
Thousands of cases were brought before the courts. Thousands of families were trapped in protracted proceedings. And ultimately, a climate of uncertainty, ambiguity, and conflicting interpretations took shape.
And perhaps the most revealing fact is this:
About half of the applications—mark my words—were rejected by the courts. Nearly one in two applications ultimately failed to meet the eligibility criteria for protection.
In other words, a framework established to protect the vulnerable has, in many cases, ended up blurring the line between genuine vulnerability and strategic non-compliance.
Let’s be honest about this.
PASOK and SYRIZA, which defended this framework, bequeathed a time bomb to the country. It constantly generated uncertainty.
The current government has decided not to kick the can down the road again. Not to hide behind legal interpretations, but to provide a clear solution to the problem.
The decision by the Plenary Session of the Supreme Court provided crucial legal guidance on how to calculate interest. We, however, are not stopping there.
We are enacting legislation for universal application and providing a solution for everyone with active repayment plans—without new court cases, without new appeals, and without further hardship.
In other words, more than 100,000 of our fellow citizens will immediately see their monthly payments drop sharply—in many cases by as much as 300 euros a month. This is a real relief for every household and greater justice in practice.
But we didn’t stop there.
We deliberately went beyond what the decision itself required, because we believed that political responsibility is not limited to strict legal compliance.
And this must be stated plainly, without beating around the bush. The government was not obligated to enact retroactive legislation. We could have limited ourselves to applying the new calculation method from today onward. We could have said that the issue was resolved only for the future.
We did not do that. We chose to go much further. We chose to recognize that those who, over all these years, remained consistent and paid more than they ultimately owed are entitled to meaningful redress.
The excess amounts that have already been paid are recognized as principal repayment, reducing the outstanding balance and shortening the repayment period.
This means smaller installments—faster repayment.
In other words, we are not merely doing the minimum required by a court. We are doing the maximum required by our political responsibility.
The total cost of the settlement amounts to approximately 700 million euros. About 500 million relates to future relief for borrowers, and about 200 million to retroactive reimbursement for amounts already paid.
And I want to be absolutely clear. This burden will not fall solely on the state.
It will be shared by both the banks and the “Hercules” state guarantee scheme, in proportion to the amounts each party has collected.
With this same provision, we clarify that the arrangements concluded through the Out-of-Court Mechanism are not affected by this provision. The terms of the arrangements remain unchanged, and, most importantly, interest rates do not change. This means that we are providing substantial relief to borrowers without creating new uncertainties.
In recent days, we’ve heard a lot of noise from the opposition—hasty accusations and grand statements.
But there is an irony here.
Some have presented themselves as self-appointed defenders of borrowers, yet ultimately demanded less than what the government’s current measure provides.
They spoke only of implementing the decision. We are bringing universality.
They spoke, however, very vaguely about redress. We are introducing retroactivity.
Some saw the borrowers’ distress as an opportunity for political exploitation.
We saw an obligation of political responsibility.
And that is what ultimately defines a government: who can take complex, long-standing problems and transform them into clear, stable, and workable solutions.
Ladies and gentlemen,
Private debt remains one of the most difficult legacies of the crisis. And when we talk about private debt, we are actually talking about a family struggling to meet its obligations, a business owner trying to keep their business afloat, and a citizen who is not asking for privileges but for a genuine second chance.
- Private debt as a percentage of GDP fell to 94.1% in 2024, with Greece now below the European average of 121.4%.
- Non-performing loans at Greek banks have also fallen dramatically. From approximately 40% of the loan portfolio when we took office in 2019, they now stand at less than 3%, a level now comparable to the European average.
- Through out-of-court settlements, more than 62,000 arrangements have already been reached, totaling over 19 billion euros. Compared to 2022, out-of-court settlements have increased by 700%.
- Performing loans are more than double the amount of non-performing loans.
However, even if just one citizen remains trapped, our responsibility remains. Their problem is our problem. That is why, with the bill we are voting on today, we are decisively strengthening all tools for managing private debt.
- We are lowering the threshold for eligibility for out-of-court debt settlement from 10,000 to 5,000 euros, opening access to approximately one million of our fellow citizens.
- We are introducing the option to settle debts owed to the government and social security funds in up to 72 installments.
- We are raising the exemption threshold—Mr. Simopoulos, in response to your question—from 1,250 to 1,600 euros.
- At the same time, we are substantially strengthening the protection of primary residences through the out-of-court mechanism. The out-of-court mechanism now offers borrowers a clear and realistic option: They can protect their primary residence by liquidating their other assets, thereby securing a larger debt reduction and lower monthly payments. This substantially increases the chances that they will be able to keep their home and make their repayment plan truly sustainable.
Through all these measures, we are building a comprehensive safety net.
A framework that offers second chances, protects homes, and rewards consistency.
But economic policy is not judged solely by how it handles the unresolved issues of the past, the unresolved issues of yesterday.
It is also judged by how it responds to the pressures of the present.
And today, those pressures are very real.
The war in the Middle East, we hope, is coming to an end. Its economic consequences, however, will not disappear overnight. The pressures on international energy markets and supply chains are leaving a mark that will continue to affect prices for some time to come.
And we know very well how this pressure translates into the daily lives of citizens. It affects the cost of fuel, supermarket prices, and ultimately a family’s disposable income at the end of the month.
That is why we must take timely and targeted action to ensure that economic progress benefits society.
- With this in mind, we are introducing a financial assistance payment of 150 euros for each child—a measure that will benefit approximately 975,000 families and more than 3.3 million of our fellow citizens.
- We are further strengthening support for retirees by increasing the permanent annual allowance from 250 to 300 euros and broadening the income eligibility criteria, so that approximately 85% of retirees will now receive this allowance.
Because when the economy is doing better, this progress must reach the citizens.
- The same obviously applies to housing. For thousands of young people and families, rent has become one of the biggest burdens of daily life. That is why we are significantly broadening the eligibility criteria for annual rent reimbursement, extending the measure’s coverage to approximately 887,000 households.
- At the same time, we are taking special care to support public servants who work far from their homes—people who sustain critical government functions on a daily basis and keep the state apparatus, the public sector, running in every corner of the country.
Ladies and gentlemen,
All these measures have one thing in common.
For a state to be able to sustain its society over the long term, the economy must generate more wealth.
There can be no strong welfare state without a strong productive base.
That is why this bill is not just about relieving the burdens of the past. It is also about creating the conditions for greater prosperity in the future.
In recent years, Greece has been gradually changing its economic model.
We have already achieved political, economic, and fiscal stability.
But consider two more variables that are critical in relation to the model of the Greece that went into default in 2009–2010.
Investment as a percentage of GDP. When we took office in 2019, it was 11%—the European average is around 21%—and now it stands at nearly 17%.
Exports: the second factor. When Greece went bankrupt, exports accounted for about 20% of its GDP. Today, we’re at around 42–43%. We remain below the European average, which is 51%—and investment stands at 21%—but we’re on a path to transforming our economic model, a process that’s unfolding day by day.
These indicators, in other words, reflect this deeper transformation. They show that the Greek economy is becoming more productive, more outward-looking, and more competitive.
And if we want to accelerate this transition, we need more investment, more productive capital, and more financing for businesses that want to grow, innovate, and create well-paid jobs.
This is precisely what the provisions of the bill on investment funds are designed to achieve.
With this bill, we are establishing—for the first time in Greece—a modern and competitive framework for the management of alternative investments, with the aim of attracting international investment funds, fund managers, and highly specialized professionals to Athens.
What do we offer? Legal certainty, stability, and clear rules.
We are making it clear that foreign funds and their parent companies will continue to be taxed where they are established, while any actual economic activity we conduct in Greece (offices, services, salaries, corporate profits, and VAT) will be fully taxed here.
But let’s clarify the framework. And at a time of international geopolitical uncertainty, with Greece regarded as a beacon of stability, this is an opportunity for our country to develop this sector as well. In other words, we are creating a framework that attracts capital without eroding the country’s tax base.
And the benefit for Greece, ladies and gentlemen—and please keep this in mind—is far greater than the immediate tax revenue. A strong investment management hub in Athens means new, well-paid jobs, the transfer of know-how, and the development of an entire high-value-added ecosystem.
In other words, we do not want Greece to be merely a place where capital is consumed. We want it to become a place where capital is managed, a place where decisions are made, and a place where economic value is generated.
And that is precisely what this regulation is designed to achieve.
But along with growth, we also need rules.
We also need a government that can protect citizens from illegal activities that erode the economy and, yes, undermine social cohesion.
I am referring to the provisions on illegal gambling.
Not only because of the seriousness of the problem, but also because this is essentially where the current bill began, before it was expanded to include the other necessary provisions we are discussing today.
And here we are not simply talking about an illegal economic activity but about a deep-seated social problem.
Nearly 800,000 of our fellow citizens participated in illegal gambling in 2024.
But the real problem is never limited to the numbers. It lies in the addiction that destroys lives, in the younger generation that is being exposed to this trap at an increasingly early age, and in the families who watch their loved ones gradually lose control of their lives.
That is why the government’s response must be decisive.
We are therefore providing new digital monitoring tools, strengthening oversight mechanisms, and imposing stricter penalties because technology must not be allowed to become a shield for illegal activity.
It must become a tool for combating it.
And ultimately, this is the common thread that unites all the provisions of this bill.
- We do not allow problems to drag on.
- We do not allow injustices to be perpetuated.
- We do not allow distortions to become entrenched.
- We intervene, we solve, we correct.
This is the essence of the policy of Kyriakos Mitsotakis’s government.
We will not stand idly by in the face of difficulties; we will take responsibility for finding solutions.
That is our duty.
This is our responsibility.
And it is this responsibility that we are fulfilling and taking on today.
Thank you very much.”