The Finance Ministry is drafting legislation aimed at closing the issue of the so-called Katseli law for the protection of borrowers once and for all. The intervention seeks to put an end to differing interpretations of the provisions of the older law.
Specifically, some argue that it does not entail an interest-free loan with interest applied only to each monthly installment separately, but rather that interest should indeed be charged monthly while being calculated over the entire duration of the repayment arrangement.
The new ademdment will seek to put an end to the discussion that other categories of over-indebted borrowers can claim a similar solution, such as those who are included in the extrajudicial mechanism, as this would overturn the entire methodology applied by the banking system – not only in Greece but internationally – for its calculation method, opening the door to different calculation of the interest rate on all nonperforming loans.
The issue of retroactivity remains under discussion, on which the Supreme Court did not take a position – as it was not supposed to do – and which is equally crucial, as it may also give rise to a multitude of appeals.
