Debt cuts for sustainable firms in works

The government’s plan for the settlement of nonperforming loans and the streamlining of corporations, small and large, foresees slashing the debts of enterprises to tax authorities, social security funds and banks, according to a draft law that is currently under preparation.

The main condition for an enterprise to enjoy this beneficial provision is to show it can be sustainable, ie to be able through the debt settlement process to service any other obligations, by following a streamlining plan that will be assessed via a mathematical formula.

The haircut will be conducted in proportional terms, depending on the size of each debt a company has. This method will mainly apply to small and medium-sized enterprises, which have an annual turnover up to 2.5 million euros. It remains to be seen whether the same formula will be used for the settlement of the debts of the self-employed.

Debt settlements will be tailor-made for bigger companies, resulting from a streamlining program to be agreed on an ad-hoc basis by each firm’s creditors.

The draft law is currently being processed by the Economy Ministry and will be discussed with the representatives of the country’s creditors in the next few days.

Source:ekathimerini.com