State to ease arrangement of bad loans

The government proposed on Friday an out-of-court settlement model to banks for the debts that individuals owe to them, which foresees the subsidization of payment tranches so as to protect the main residences of debtors who are unable to meet the requirements of their arrangements.

The subsidy will concern specific categories of households and will be based on income and property criteria that will be determined by a special task force formed for that purpose, according to the proposal that Prime Minister Alexis Tsipras made to the board of the Hellenic Bank Association.

The bank managers met the premier at his office to discuss how the government could assist in achieving a drastic reduction of nonperforming loans while protecting debtors' main residences. Sources say that the model is based on the debt settlement process used in the extrajudicial mechanism for...