Greece’s economic team is considering a significant overhaul of its debt repayment framework, including thereintroduction of the 120-installment schemefor overdue contributions to the country’s main social security fund,EFKA. The initiative aims to provide relief to nearly500,000 small and medium-sized enterprises (SMEs) and freelancersstruggling with debts of up to €10,000.
Extended Installments Under Review
Currently, taxpayers can settle arrears in24 or 48 monthly installments. Under the new plan, this ceiling would rise to48 and 72 installments, while those who previously defaulted on the 120-installment program would be allowed to re-enter, provided they make adown payment equivalent to three monthly installments.
Draft proposals outline a two-tiered approach:
- Up to 120 installmentsfor debts below €10,000.
- Up to 72 installmentsfor debts between €10,000 and €15,000.
Eligibility will require a lump-sum payment of10% of missed installmentsto reactivate the scheme.
SMEs Under Strain
The need for broader debt relief is underscored by a recent survey from theAthens Chamber of Small and Medium-Sized Industries (BEA), showing thateight in ten SMEs cannot service their obligations, whilesix in ten have raised pricesover the past year to absorb cost pressures — fueling broader inflationary concerns.
Meanwhile, unpaid social security contributions have ballooned to€50 billion, prompting authorities to accelerate collection efforts. This fall, a tender will invite private firms to assistEFKAand theCenter for the Collection of Social Security Debt (KEAO)in designingtargeted, individualized repayment schemesbased on debtor profiles.
Pensioners’ Debt Relief Limited
The current framework for insured workers — mainly freelancers and farmers — remains limited. Though eligible for debt settlement via partial deductions from future pensions, fewer than8,000 applicationshave been filed so far, with onlyjust over half approved.
The conditions remain strict:
- Debts must not exceed €30,000 (€10,000 for former OGA farmers).
- Applicants must be at least67 years old, or62 with 40 years of insurance contributions.
- Applicants must have at least20 years (6,000 days) of contributions paid, andbank deposits below €12,000(€6,000 for OGA-only debtors).
Failure to meet these criteria leaves many pension applicants locked out of settlement, delaying retirement and adding financial pressure.
Balancing Debt Relief with Fiscal Stability
The government’s challenge is twofold: toease liquidity pressureson small businesses that form the backbone of the economy, while also ensuring thatEFKA’s balance sheet remains sustainable. Officials are expected to finalize the new framework in the coming months, amid growing calls from industry groups for“more generous and lasting solutions.”