Greece's Finance Ministry has submitted to parliament a bill introducing out of court settlements for businesses unable to pay back debts to banks and the government, officials said Thursday.
Greece's international creditors - the International Monetary Fund and eurozone countries - have signed off on the legal framework for the procedure that will allow businesses, regardless of size, with debts above 20,000 euros to pay them back in up to 120 monthly installments.
The law is seen as providing major relief for Greek banks struggling under the weight of bad loans, reaching some 110 billion euros, or more than 50% of total loans. Lenders need to get these non performing loans, many of which are linked to real estate assets, off their books to improve their health and resume lending to the economy.
Bank officials, however, do not expect the out of court settlement procedure to start operating this year since the process needs some six months to be up and running after being voted in by lawmakers.