Having sharply reduced its public debt burden in recent years, the Greek state is turning its attention to one of the economy’s most persistent legacies of the financial crisis: private debt.
The government is preparing a broad package of measures aimed at helping households and businesses manage overdue obligations to the tax authorities, social security funds and financial institutions while restoring access to banking services and liquidity.
According to official figures, overdue tax liabilities exceed 114.5 billion euros, with about 4.25 million taxpayers owing money to the Independent Authority for Public Revenue (AADE). Only 6.8% of overdue tax debt is currently covered by repayment arrangements, while roughly one-third is considered uncollectible. Separately, arrears owed to the country’s main social security fund (EFKA) have risen above 50.8 billion euros, increasing by around 2.1 billion euros over the past year.
A central element of the package is a new repayment plan allowing up to 72 monthly installments for eligible tax and social security debts incurred through the end of 2023 that were not already under an active settlement. The measure is intended to bridge the gap between the standard 24-installment scheme and Greece’s out-of-court debt restructuring mechanism.
The government also plans to raise the protected balance on bank accounts subject to tax enforcement from 1,250 euros to 1,600 euros a month. Similar protections would apply to debts owed to private creditors and banks, while debtors who pay 25% of the amount that triggered an account seizure and restructure the remainder would be able to seek the lifting of the freeze.
Another key reform would broaden eligibility for the out-of-court debt settlement mechanism by lowering the minimum debt threshold from 10,000 euros to 5,000 euros, potentially extending access to about one million additional individuals and businesses. The mechanism allows borrowers to consolidate debts owed to the state, social security funds, banks and loan servicers under a single restructuring agreement, with repayment periods of up to 240 installments for public-sector debts and 420 installments for private financial obligations.
The package also includes changes affecting primary residences. Under the proposed framework, a debtor’s main home could be treated separately from other assets during restructuring, while amendments to the Katseli Law would reduce interest costs by calculating interest on monthly installments rather than on the outstanding balance.
According to recent reporting by To Vima, the government has increasingly shifted its focus from emergency debt collection toward restoring the financial viability of households and small businesses. The newspaper has reported that officials view broader participation in the out-of-court mechanism and the creation of a unified Private Debt Registry as central to improving debt management, reducing non-performing obligations and supporting credit expansion. The registry is expected to provide authorities with a comprehensive picture of each debtor’s obligations across tax authorities, social security funds, banks, loan servicers and other creditors, allowing future policy to be based on total indebtedness rather than isolated liabilities.
The success of the strategy will ultimately depend on whether more debtors enter restructuring programs, remain current on repayments and regain access to the financial system, helping convert long-standing private debt into a manageable component of Greece’s post-crisis economic recovery.
