The Ministry of Finance is tackling one of the most complex problems: finding a comprehensive, definitive and sustainable solution for Swiss franc loans, which amount to 6 billion euros. Of these, 2.3 billion remain on bank balance sheets, while 1 billion are in arrears. However, the majority of loans have been securitized, sold to funds and managed by servicers. The total claim, together with default interest, exceeds 4.6 billion euros and concerns approximately 20,000 borrowers. Over the past month, the ministry has been in intensive negotiations with banks, seeking a balance between the requirements of the European Supervisory Mechanism (SSM) and the need to secure the guarantees provided by the Greek State through the securitizations of the “Hercules” program.
Since the non-performing loans have been transferred to the Asset Protection Scheme and are managed by servicers, any reduction in claims would negatively affect recoveries and lead to losses of state guarantees, with ultimate cost to Greek taxpayers. A significant problem is presented by the Cairo II securitization, which shows underperformance of about 50%, due to Swiss franc loans, the long suspension of auctions and the non-implementation of the sale of the restructured loan portfolio, as provided for in the business plan. The solution for Swiss franc loans appears to necessarily pass through the out-of-court mechanism, where however critical issues are raised that must be carefully examined.
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