PASOK unveils 11-point private debt plan as Greek finance ministry rejects proposals

PASOK presents eleven-point debt relief plan

At an event held at the Serafeio cultural complex in Athens, PASOK leader Nikos Androulakis unveiled an 11-point legislative package targeting Greek private debt. The proposal includes re-establishing statutory protections for primary residences using objective income and asset criteria, alongside a new 120-installment repayment framework for tax and state obligations capped at 500,000 euros. Under the opposition proposal, debtors who consistently adhere to their settlement schedule would receive a reduction in accrued penalty surcharges and a 30% cancellation of principal debt. The party package also seeks to raise income and wealth thresholds for designated vulnerable debtors by 25%. Androulakis framed the policy package as an essential intervention to protect household stability and support small business production.

Our proposal is based on a clear principle: whoever can pay must pay. Whoever wants to be consistent must have the possibility of a sustainable settlement. And whoever is in real difficulty must have a second chance. With rules and transparency.

Proposed rules for loan servicers and currency risks

The opposition plan introduces binding operational rules and financial penalties for credit servicing firms and investment funds that manage distressed loan portfolios. It grants individual borrowers a preemptive right of option to repurchase their outstanding debt at a discount before it is transferred or sold to investment funds. For borrowers with Swiss franc mortgages, PASOK proposes distributing foreign exchange risk so that commercial banks absorb two thirds of the currency loss while borrowers shoulder one third. The initiative additionally outlines legal protections for loan guarantors, shields agricultural land from forced liquidation, and creates unseizable commercial bank accounts up to defined limits. Local Debt Settlement Committees would be established across regional units to handle restructuring cases.

Scale of non-performing liabilities across Greece

Economic figures presented during the party announcement outline the magnitude of unpaid obligations across the country. Credit servicing companies currently manage 92 billion euros in debt affecting over 2.6 million citizens, while non-performing debt held across banks and funds stands at nearly 80 billion euros. Broader overdue liabilities involve 3.5 million citizens owing a cumulative 114 billion euros. Unpaid social security contributions exceed 52 billion euros, while utility arrears in the energy sector surpass 3 billion euros. Androulakis noted that 1.6 million citizens face forced debt enforcement measures, while notarized auction acts have more than doubled relative to 2019 levels.

Finance Ministry dismisses proposals as unworkable

The Ministry of National Economy and Finance responded by rejecting the proposal, asserting that PASOK rebranded existing government policies alongside measures that conflict with European Union insolvency rules. Ministry officials stated that primary residence protections through the out-of-court settlement mechanism are already codified in state law and take effect on 21 September 2026. The government noted that existing frameworks provide up to 72 installments for older liabilities and up to 240 installments for state debt through extrajudicial channels. Furthermore, the ministry characterized the borrower pre-sale buyout proposal as legally unworkable under European insolvency standards.

PASOK called a new plan a collection of already implemented policies and old recipes.

Opposition response and legislative plans

PASOK officials rejected the government response, asserting that current debt settlement mechanisms leave distressed debtors unprotected while servicing firms achieve elevated profits. Banking and private debt sector representatives Milena Apostolaki and Dimitris Spyrakos stated that the ministry treats private insolvency as a pure accounting metric rather than a broader social and economic issue. They argued that creditor participation in the existing out-of-court framework remains non-mandatory for corporate debtors and many individual cases, leaving applications without binding resolutions. PASOK announced it will submit the entire 11-point plan to the Greek Parliament as a comprehensive draft bill.