G. Bratakos: The acceleration in the loan arrangements will become a breath of life for Greek entrepreneurship

The president of the Athens Chamber of Commerce and Industry, Giannis Bratakos, refers to the need to speed up the procedures for the targeted and effective regulation of the loan obligations of companies in an article in APE-MPE.

The president of EVEA emphasizes that “for the rescue acceleration”, it is imperative to reform the justice system and speed up the relevant procedures.

Criticizing the promotion of out-of-court mechanisms, such as mediation, is crucial for decongesting the judicial process, adding that “chambers, as institutional advisers to the State and entrepreneurship, can play an active role in the mediation process, as they have the appropriate experience “and notes that the expanded adoption of this method is the only one that can gradually lead to banking regularity and” which in turn will give a breath of life to Greek entrepreneurship. ”

Following is the article by the president of the Athens Chamber of Commerce and Industry Giannis Bratakou

The threshold of 2022, finds us in the midst of opposing forces. On the one hand, the impetus for expected growth and expected recovery. On the other hand, the weight of the health situation and the pressures of inflation. In this environment of conflicting messages, Greek entrepreneurship is called to stabilize its course and regain access to the most useful tool that can strengthen it: bank financing.

So if we consider that bank financing is the heart of entrepreneurship, then the settlement of loan obligations are the arteries that ensure its smooth operation. This is a problem that concerns an overwhelming percentage of small and medium-sized enterprises. The field, however, remains cloudy.

In an effort to consolidate their balance sheets, the systemic banks sold a huge number of non-performing loans to third-party investors at a discount. This created a new and powerful financial pillar, which now manages receivables in excess of € 100 billion.

The new owners of the loans, assigned to management companies the admittedly difficult role of settling the obligations with the borrowers. In recent months, however, realizing that companies are also unable to offer viable solutions, they are turning to the resale of loans, with an even bigger discount.

As property ownership passes from hand to hand, at ever lower prices, the amount and duration of liabilities remain undiminished and unbearable for individuals and businesses. Who remain in productive weakness, without the slightest possibility of refinancing, often resorting to the informal economy, hurting the national economy even more.

The existing model is not viable for any of the counterparties. Loan owners charge their balance sheets with non-performing loans. Borrowers are completely cut off from bank financing and several of the financial tools provided, unable to return to the production process. While management companies become the target of criticism and harsh persuasion, for inaction and bad practices. This is a vicious circle, which will continue as long as there is no motivation. Both for intermediaries and for borrowers.

And while for management companies incentives can only be financial, for those entrepreneurs who do not belong to the strategic defaulters, the most useful incentive is time. And more specifically, the acceleration of the procedures for the targeted and effective settlement of their loan obligations. For this saving acceleration, we must turn our attention to the upgrading of justice.

At institutional level, there is an urgent need to reform the justice system and speed up the relevant procedures. Even today, there are significant delays in the settlement of the pending cases of the Katselis Law. There should therefore be a plan as soon as possible to speed up the trial of the more than 40,000 cases that are still pending. And to accelerate the digitization of justice and its structures, so that – in addition to saving time – to strengthen the objectivity, integrity, transparency and accuracy of the system.

The most critical need, however, is to promote out-of-court mechanisms, such as mediation, to decongest the judicial process. Its results can be beneficial, as in a very short time, a mutually beneficial compromise is ensured.

Chambers, as institutional advisors to the State and Entrepreneurship, can play an active role in the mediation process, as they have the appropriate experience to contribute to the immediate resolution of practical issues and the avoidance of delays. Because the expanded adoption of this method is the only one that can gradually lead to banking regularity. Which in turn will give a breath of life to Greek entrepreneurship.

Source: AMPE