Greece: A Banking & Finance Overview

This note highlights selected recent legislative and judicial developments in Greece expected to impact the banking and finance landscape. The focus is on reforms affecting loan enforcement, transaction structuring and cost allocation, as well as recent case law on loan economics.

Swiss Franc Loans: Statutory Conversion Framework

Loans denominated in Swiss francs, which generated extensive and inconsistent litigation following currency fluctuations, are now addressed through a statutory mechanism under Article 128 of Law 5264/2025. The law introduces a framework for the conversion of CHF-denominated loans into euro, applicable to both performing and non-performing exposures of individuals and sole proprietorships. Conversion is effected by reference to the European Central Bank (ECB) exchange rate at the time of application, without commission.

The framework provides for statutory adjustments to the conversion rate (ranging from 15% to 50% depending on the borrower category) and fixed euro interest rates for the remaining term (between 2.3% and 2.9%). For non-performing exposures, the mechanism is linked to the out-of-court restructuring process under Law 4738/2020 and includes a statutory creditor binding effect in defined circumstances.

Security remains in place, and the conversion is treated as a modification of the existing obligation rather than as a novation. The regime also provides for the discontinuation of pending litigation and enforcement measures upon inclusion in the scheme. This framework replaces fragmented litigation outcomes with a uniform statutory solution and is expected to accelerate the resolution of legacy CHF exposures while reducing enforcement uncertainty.

Amendments to the Enforcement Framework: Reduction of Guarantee Requirement

An amendment to the Greek Code of Civil Procedure modifies the conditions under which a creditor may receive auction proceeds while a challenge to the ranking of creditors is pending. Previously, a creditor could receive proceeds only if it provided a bank guarantee equal to 100% of the disputed amount, which often delayed distributions. The amendment reduces this guarantee requirement to 40% of the relevant claim.

The guarantee may be issued by a credit institution or an authorised insurance undertaking and must be payable on first demand and renewed prior to its expiry. This change reduces the liquidity burden on creditors and facilitates earlier distributions, while maintaining protection for competing creditors pending final adjudication. The amendment is expected to improve enforcement efficiency and recovery dynamics, particularly in distressed and non-performing exposure scenarios.

Digital Transaction Levy: Scope Clarification and Impact on Financing Structures

The introduction of the Digital Transaction Levy under Law 5135/2024, as codified by Law 5177/2025, replaces the stamp duty regime with a digital framework applicable to specified transactions. The regime introduced structural changes, including the removal of territoriality requirements and a unified digital process for declaration and payment.

Further clarification has been provided through Circular AADE E.2094/2025, which confirms that transactions falling within other tax frameworks (including VAT) are excluded from the digital levy. The Circular also clarifies that ancillary agreements follow the treatment of the principal transaction, meaning that where the main agreement is exempt or outside scope, related arrangements are treated consistently. This represents a departure from the previous stamp duty framework, under which ancillary agreements could be taxed independently. The regime, as clarified, enhances consistency and predictability in transaction cost allocation and reduces structuring inefficiencies.

Supreme Court Pilot Decision on Interest Calculation

A recent pilot decision of the Plenary of the Greek Supreme Court (Areios Pagos) addresses the methodology for calculating interest in loans subject to Law 3869/2010 (the "Katseli Law"). The decision concerns approximately 250,000 borrowers and loan exposures of around EUR12.5 billion, a significant portion of which has been securitised under the "Hercules" scheme.

The Court held, by majority, that interest must be calculated on the basis of the monthly instalment determined by the court decision, rather than on the total outstanding principal. The distinction is material, as applying interest to the instalment significantly reduces the overall interest burden and alters the economic profile of these exposures.

The decision is reported to be grounded in the protective purpose of Law 3869/2010, but at the time of writing, the full reasoning has not yet been published. Market participants are awaiting the official text to assess its scope, including potential retroactive effect and restitution claims. The decision introduces legal and economic uncertainty and may require reassessment of interest calculation practices across affected portfolios, pending clarification of its full implications.

Conclusion

The developments surveyed in this note reflect a continued effort to address legacy issues in Greek banking and finance while enhancing certainty for market participants. The Swiss franc conversion framework and the reduced guarantee requirement in enforcement proceedings both aim to resolve longstanding sources of uncertainty and improve recovery dynamics.

The Digital Transaction Levy clarifications reduce transaction costs by confirming that ancillary agreements follow the treatment of the principal agreement. The Supreme Court's pilot decision on interest calculation, while introducing short-term uncertainty, may prompt reassessment of interest methodologies across affected portfolios.

Taken together, these developments signal a maturing legal and regulatory environment that prioritises clarity, efficiency and proportionality. Market participants should monitor the publication of the full Supreme Court reasoning and any implementing guidance, as well as the uptake of the Swiss franc conversion mechanism, to assess the practical implications for ongoing transactions and portfolio management.