Greece adjusts Katseli law interest rules, cutting monthly payments for thousands
The Greek government moved to cut monthly loan payments for thousands of households under the Katseli law. A new legislative provision, submitted on 23 June 2026, implements a Supreme Court ruling that interest must be calculated on the court-ordered installment, not the total debt.
The Supreme Court ruling
On 5 June 2026, the Plenary of the Supreme Court (Areios Pagos) issued decision 6/2026, clarifying that interest on restructured loans under Law 3869/2010 (the Katseli law) should be calculated on the monthly installment set by the court, not on the total outstanding debt. The ruling addressed a long-standing distortion that had inflated payments for borrowers who had secured court-ordered debt relief to protect their primary residence.
- Supreme Court plenary issues decision 6/2026 on interest calculation
- Ministry submits legislative provision to implement and expand the ruling
What the new provision changes
The Ministry of National Economy and Finance submitted a legislative provision on 23 June to ensure uniform application of the ruling. The provision specifies that from 5 June 2026 onward, interest accrues only on the monthly installment and only for the period between consecutive payments. For the first installment, a 30-day interest period applies. The ministry stated that this eliminates a practice that had created excessive burdens for years.
The State is not limiting itself to mere compliance with the judicial decision. It goes a step further, providing a broader, cleaner and substantive solution for citizens, in a way that definitively removes doubts and ensures uniform application for all.
Retroactive relief for consistent borrowers
The provision also addresses overpayments made by borrowers who continued to meet their obligations under active restructurings. Excess amounts already paid are recognized as principal repayment, reducing the remaining balance and shortening the number of future installments. The difference between total amounts paid and what should have been paid is deducted from the last installments in chronological order, reducing the total number of remaining payments. This retroactive recognition applies to active restructurings that have not been terminated or declared forfeit. Amounts paid under restructurings that have already been completed or forfeited are not reclaimed.
Burden sharing and out-of-court settlements
The financial impact is shared between banks and the state-guaranteed "Hercules" securitization program, based on the amounts each has already collected. For loans transferred to Hercules, banks must return excess amounts collected before the transfer. The provision also confirms that settlements reached through the out-of-court mechanism remain governed by existing rules, where the monthly installment is calculated as a principal-and-interest payment on the total regulated debt, not on the monthly installment.
