EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 23 May 201 3 
on debt arrangements for over -indebted individuals  
(CON/20 13/34) 
 
Introduction and legal basis  
On 30 April 2013, the European Central Bank (ECB) received a request from the Greek Ministry of 
Development, Competitiveness, Infrastructure, Transport and Networks for an opinion on draft provisions 
reforming the framework on debt arrangements for over -indebted individuals (hereinafter the ‘draft 
provisions ’). The draft provisions comprise  draft amendments to La w 3869/20101 (hereinafter the ‘ draft 
amendments to Law 3869/2010 ’) and draft provisions on the establishment of a forbearance scheme 
aimed at supporting i ndividuals  in deep financial distress (her einafter the ‘draft provisions on the 
facilitation programme ’). 
The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the 
Functioning of  the European Union and the sixth  indent of Article  2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the Europe an Central Bank by national  authorities regarding draft 
legislative provisions2, as the draft provisions  relate to rules applicable to financial institutions , insofar as 
they materially influence the stability of financial institutions and markets . In acco rdance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion.  
 
1.  Purpose of the draft provisions  
1.1 The draft amendments to Law 3869/2010 aim at enhancing  the effec tiveness of the existing legal 
framewo rk on  debt arrangements for over-indebted individuals  (hereinafter also referred to as 
‘debtors ’). To this end, the draft provisions  redesign  the procedure for debtors to apply for a  
judicial  arrangement  in respect of their due debts . The court hearing concerning applications for 
such arrangement s shall take place within six months of the date of submission of the application  
by the debtor . The application must be accompanied by document ation regarding the applicant’s 
assets, income and creditors, as well as those credito rs’ claims . The creditors shall have the right to 
access the document ation  included in the court file . 
1.2 During the two months following the submission of the application for a debt arrangement, debtor s 
and creditors  shall be required  to negotiate  an out -of-court settlement . The settlement shall be  
                                                 
1  Law 3869/2010 on debt arrangemen ts for over -indebted households and other provisions  (FEK 130 A/3.8.2010).  
2  OJ L 189, 3.7.1998, p. 42.  
ECB -PUBLIC  
2 concluded upon the approval of a majority of the creditors , and it will then be submitted to the 
competent court  for validation . In the event of failure to c onclude  an out -of-court  settlement  on the 
expiry of the a bovementioned two- month period, debtor s shall be required  to continue serv icing  
their debts under the conditions defined by the competent court , pending a final ruling on the 
application for a debt a rrangement. Under certain circumstances, the court may  also grant  debtors  
protection from  creditors with regard to enforce ment  of the latters ’ security . Debtors  shall be  
subject to an enhanced  duty of disclosure , as penalties for the no n-disclosure of other creditors are 
also laid down.  
1.3 The draft provisions on the facilitation programme  allow individuals in financial distress to service 
their loans by paying reduced monthly instalments for a  prescribed  period of time . The facilitation 
programme shall ap ply exclusively to  loans which have not fallen due, are secured on residential 
property and owed to credit institutions, financial institutions and credit companies. 
1.4 Those eligible for benefiting from the facilitation programme are individuals whose total household 
income at the time of submission of the application has fallen by at least 20  % compared with 
2009. The draft provisions lay down additional eligibility criteria relating, inter alia , to the value of 
the debtor’s primary residence and total i mmovable property, as well as to the total annual 
household income. Debtors who benefit from the facilitation programme are subject to an ongoing  
duty of disclosure of their financial status , and failure to compl y with that duty  results in the 
debtor’s rem oval from the scheme . 
 
2. General observations  
The ECB welcomes the draft provisions, to the extent that they  seek to comprehensive ly amend the 
framework  on debt arrangements for over -indebted individuals currently in force, in line with the 
objectives out lined in the Memorandum of Economic and Financial Policies, as applicable from time to 
time3. In relation to the development of the a bovementioned framework, the ECB refers to its previous, 
relevant opinions4. Without prejudice to this general observation, the ECB has the following specific 
observations.  
 3. Specific observations  
3.1 The ECB reiterates that the reform of the framework on debt arrangements for over -indebted 
individuals should ensure a n adequate balance between , on the one hand, observance of  the general 
duty of debtors to meet  their payment obligations , which  promot es a prompt payment culture, 
preserv es the soundness of Greek credit institutions and prevents  moral hazard and, on the other 
hand, the need to provide assistance to individuals in dire financial situation s. In this respect, the 
                                                 
3  Annex V to Law No 4046/2012 on the approval of the draft financing agreements between the European Financial 
Stability Fund, the Hellenic Republic a nd the Bank of Greece and of the draft Memorandum of Understanding between 
the Hellenic Republic, the European Commission and the Bank of Greece and other provisions of utmost importance for reducing the public debt and saving the national economy (FEK A 28/14.12.2012) . 
4  See ECB Opinions CON/2010/34 and CON/2012/ 40. 
ECB -PUBLIC  
3 proper  and swift  implementation of the envisaged framework , both by the  authorities administering 
the schemes a nd by  credit institutions  and other entities affected by them , is of crucial importance 
for ensuring the abovementioned balance and thereby preventi ng serious adverse consequences for 
banks’ capital and liquidity positions. Proper implementation  of the envisaged framework  involves , 
inter alia , devoting sufficient resources and ensuring the establishm ent of  efficient procedures for 
facilitating the conclusion of  out-of-court settlements.  
3.2 The ECB welcomes the determination of appropriate time limits for the negotiation of out -of-court 
settlements and for the hearing of debt arrangement applications , as a means to accelerate the 
procedure . The ECB understands that the arrangements  for debts that have fallen due  require 
proper consideration by the competent court s, as a means to ensure that arrangements  are sound 
and workable . Moreover, the ECB welcome s the reinforcement of the debtors’ duty of disclosure  
by also laying down penalties for the non- disclosure of other  creditors . 
3.3 At the same time, the re are  certain prerequisites which  are necessary for  the effectiveness of the 
framework . First, the dra ft provisions should ensur e the proper verification of the documentation to 
be submitted with the applications for debt arrangements. Second, the draft provisio ns should 
emphasise that the  granting of debt arrangements shall be subject to the strict obser vance of the 
duty of disclosure  throughout the entire duration of the arrangement . Third , effective, proportionate 
and dissuasive penalties should be applicable in ca ses of fraud or gross negligence.  Finally, an 
independent body should regularly assess the efficacy of the facilitation programme and its impact 
on Greek credit institutions.  
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 23 May 2013.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI