As preparations are underway for the tender to assign EFKA debt management to private companies, it is revealed that a significant portion of accumulated debts remains uncollectable. Specifically, debts worth 10 billion euros from the total 50 billion euros cannot be collected by KEAO, despite being maintained in the organization’s records.
Uncollectable EFKA debts
The non-collectable debts to EFKA represent debts that KEAO cannot pursue, according to newspaper “Ta Nea,” due to various restrictive factors. These factors are categorized into legal and economic reasons that make the application of forced collection measures impossible.
Legal reasons include the inability to execute court decisions and debt statute of limitations, while economic reasons primarily concern debtor bankruptcy and the absence of assets. Although these debts are not written off, their practical collection becomes impossible.
Debt accumulation and arrangements
Data from the first quarter of the current year records total debts to EFKA worth 49.73 billion euros. From this amount, 29.7 billion euros constitute the principal debt, while the remaining 20.02 billion euros result from additional fees and penalties. Particularly concerning is the fact that only 10% of total EFKA debts are in some form of arrangement, highlighting the urgent need for new approaches to debt management.
Tender for private companies
Within August, the tender will be announced that will allow private companies to participate in the process of repaying overdue insurance debts. The new system provides for collaboration with specialized consultants or consortiums that will support EFKA and KEAO.
Private partners will undertake proposing targeted and personalized debt arrangements, adapted to each debtor’s profile. The project, valued at over 100 million euros, will be distributed among multiple companies that meet the required criteria.
Major company participation
Large IT companies and the so-called “Big Four” accounting firms are expected to participate in the tender, including Deloitte, PwC, KPMG and EY. Arrangement management will focus mainly on small debtors, for whom the possibility of repayment in up to 120 installments is being examined, provided appropriate guarantees are given. For large debtors, priority is given to using the out-of-court mechanism, which provides greater flexibility and possibilities for long-term debt arrangements.
Role and responsibilities of private companies
Private companies will not be directly involved in debt collection, which remains the exclusive responsibility of KEAO. Instead, they will contribute to analysis, categorization and submission of proposals for effective arrangements, utilizing international experience and specialized risk assessment tools. Currently, neither EFKA nor KEAO has the ability to implement personalized debt arrangements, as there is a general state framework that provides uniform arrangements for all, with a limit of 24 installments for insurance debts.
New capabilities and strategies
Under the new framework, private partners will be able to propose personalized debt arrangements, taking into account the debtor’s transactional behavior, their business financial data and the viability prospects after debt relief.
Among the actions that private companies will undertake include:
- Clearing the debtor portfolio
- Mapping the real economic status of claims
- Early detection of delays and creditworthiness assessment
- Designing targeted collection strategies
