(Reuters) - Greece's government on Monday proposed forgiving up to half of about 40 billion euros in bad loans incurred by small businesses, to take some strain off a sector hammered by a six-year recession.
The move, which would be the biggest restructuring of business debt owed to Greek banks since the crisis erupted, would affect loans that have already been written off as non performing by the banks themselves.
The government, which submitted an amendment to a law to push through the proposal, said about 180,000 small and medium size businesses were eligible for a write-off of up to 50 percent of overdue debt to banks if they started making payments again.
The amendment mainly targets about 100,000 small and very small businesses that owe an average of 45,000 euros each to the banks, the government said.
"These are businesses that have been badly hurt by the crisis and survived," said Nikos Dendias, the outgoing development minister told reporters."It's our moral obligation to do that for them."
He said the EU/IMF lenders backed the move although some details still had to be agreed.
Bad loans including household and business debt have hit about 80 billion euros - or nearly half of the 182 billion euro economy - and the lenders have pushed Athens to improve current plans to resolve the issue, fearing that excess debt will hold back growth.
reuters.com
The move, which would be the biggest restructuring of business debt owed to Greek banks since the crisis erupted, would affect loans that have already been written off as non performing by the banks themselves.
The government, which submitted an amendment to a law to push through the proposal, said about 180,000 small and medium size businesses were eligible for a write-off of up to 50 percent of overdue debt to banks if they started making payments again.
The amendment mainly targets about 100,000 small and very small businesses that owe an average of 45,000 euros each to the banks, the government said.
"These are businesses that have been badly hurt by the crisis and survived," said Nikos Dendias, the outgoing development minister told reporters."It's our moral obligation to do that for them."
He said the EU/IMF lenders backed the move although some details still had to be agreed.
Bad loans including household and business debt have hit about 80 billion euros - or nearly half of the 182 billion euro economy - and the lenders have pushed Athens to improve current plans to resolve the issue, fearing that excess debt will hold back growth.
reuters.com
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