“For the first time, we are imposing strict rules on the operations of funds and servicers, with fines of up to €500,000. We are placing limits on their demands, strengthening borrowers’ rights and creating a meaningful framework to protect them from arbitrary practices”, said Dimitris Markopoulos, Deputy Minister of National Economy and Finance, on ERTnews on Sunday, referring to the government’s new bill on the management of private debt.
Mr Markopoulos said the bill was an important legislative intervention in borrowers’ favour, changing the terms of their relationship with debt-servicing companies by setting out specific obligations and restrictions, as well as strict penalties for those who breach the law.
Specifically, the bill sets a maximum 15% cap on upfront payments in direct bilateral arrangements, whereas demands could previously reach as much as 50% of the debt.
Debt-servicing companies will also be required to provide borrowers with detailed information on the progress and status of their loans, at no financial cost.
Strict penalties are also being introduced, with fines of up to €500,000, ensuring that the rules carry real consequences for those who breach them.
The Deputy Minister made particular reference to the dispute over Article 23, noting that the provision was intended to simplify procedures and reduce bureaucratic steps.
He clarified that the original loan agreement would not automatically become an enforceable title, as the relevant provision applied to the new agreement restructuring the debt. He argued that the provision would not automatically lead to an auction or deprive borrowers of their rights.
According to Mr Markopoulos, the opposition sought to present the provision in a way that distorted its content, shifting the debate away from the bill’s substantive provisions.
The government decided to withdraw Article 23 so that the dispute over it would not become an obstacle to the passage of the remaining measures to protect borrowers.
The Deputy Minister also strongly criticised the conduct of representatives of debt-servicing companies, who did not attend the stakeholder hearing in Parliament.
He described their absence as unacceptable and an affront to parliamentary democracy, noting that companies managing the debts of thousands of citizens must take part in institutional dialogue and be held accountable for their practices.
Finally, he called on the opposition parties to address the substance of the bill and make clear their position on the specific measures that strengthen borrowers’ position.
As he noted, tackling private debt requires specific solutions, effective rules and political responsibility. Borrowers need meaningful protection and workable arrangements, not delays and political games at their expense.
“The opposition is... a repeat offender: just days ago, it voted against restrictions on social media for underage children. Let’s see whether, once again, it will seek to leave borrowers without a safety net against servicers”, he said.