Sixteen years after the start of the Greek debt crisis, hundreds of thousands of non-performing loans remain tied up in the courts, limiting households’ and businesses’ access to new financing and slowing the economy’s full recovery, according to a Reuters investigation.
A typical example is the case of Mr. George, the owner of a jewelry store outside Athens, who in 2009 found himself with a new loan of 100,000 euros just as his business’s revenue was plummeting. His loan was successively transferred from bank to bank and eventually to a debt collection agency, which rejected his request for a more favorable repayment plan. The case is still pending in court, and due to interest, the debt has now doubled.
“I’ve had a noose around my neck for 16 years. I’m trapped. I can’t take out a new loan to pay off the old one, invest in my business, or even get a credit card,” he told Reuters, asking that his full name not be published.
According to data from the government and loan management companies, approximately 1.5 million citizens—nearly a quarter of the adult population—remain effectively “unbankable,” while nearly half are small and medium-sized business owners. At the same time, approximately 75 billion euros—an amount equivalent to nearly one-third of Greece’s GDP—remains tied up due to pending legal cases or delays in settlement procedures.
“An economy cannot grow in a sustainable way when such a large portion of society lacks access to financing, investment tools, business loans, or credit cards,” said attorney Nana Papageorgaki, who represents dozens of small business owners.
The Ministry of Justice told Reuters that recent changes to the Code of Civil Procedure and the hiring of 1,000 additional judges have significantly reduced the time it takes to deliver justice. According to the ministry, the average time to resolve a case has been reduced to 315 days, down from about 1,200 two years ago, and it estimates that pending cases will be resolved by 2028.
However, government officials and experts who spoke to Reuters estimate that it will take at least five more years to complete the process. Ms. Papageorgaki argues that in many cases, delays continue to approach or even exceed 1,000 days, while some cases have already been scheduled for trial as late as 2035.
The current situation has its roots in 2015, when Greece, under pressure from international creditors, established the institutional framework for the transfer of more than 90% of non-performing loans—with a total value of approximately 110 billion euros— to specialized management companies. However, this market was slow to function effectively, while protections for primary residences and mass lawsuits further slowed down the processes.
The Secretary General for Private Debt at the Ministry of National Economy and Finance, Theoni Alampasi, described pending court cases as one of the most significant obstacles to the rapid resolution of “non-performing” loans. For their part, asset management companies argue that the problem stems primarily from time-consuming legal proceedings and conflicting court rulings.
Meanwhile, thousands of business owners remain in a financial deadlock. The owner of a small hotel in Crete, who had taken out a loan of approximately 1.2 million euros in the early 2000s, stated that the management company is demanding repayment of 2 million euros within the next two years. “We can’t even replace an old air conditioner,” he remarked.