The Development Ministry is attempting to end the high interest rates mainly on consumer loans and credit cards through a bill that incorporates a European Directive, albeit with a delay compared to the deadlines set by Brussels.
The bill has been as put up for consultation until June 29 before being tabled in Parliament for voting in July. It will not have retroactive effect and the new terms in loan contracts will apply to those concluded from November 20, onward.
It concerns loan contracts without collateral on real estate and for amounts up to €100,000. So it mainly concerns consumer and repair loans, as well as credit cards, but not mortgages.
Article 40 of the draft law under consultation provides for the imposition of an upper limit on the amount of the total annual effective interest rate (AER) – the loan may not exceed 30% to 50% of the AER – as published on a quarterly basis by the Bank of Greece.
The exact percentage will be determined by decision of the Minister of Development and the Minister of Finance, in collaboration with the Governor of the Bank of Greece.
