In the first year of its operation, the “Hercules” scheme, with the participation of all 4 systemic banks of Greece, reduced NPLs by 32 billion euros, ie by about 40% of the total.
Within 13 months, “Hercules” achieved what had not been done in the previous five years.
These data were presented by George Zavvos, deputy Minister of Finance, responsible for the Financial System, during his speech at Fin Forum 2021.
In an article written for Greek Business File, G. Zavvos announced that the Greek government is preparing “Hercules II”.
“The Government is in the process of designing the second phase of the scheme, “Hercules II”, in order to address the “legacy” NPLs along with potential new Covid-related NPLs. The prolongation of the scheme will cover the period May 2021 to December 2022. By then it is expected that the stock of NPLs will have been reduced to a single-digit number and will be very close to the EU average.” G. Zavvos writes.
“Contrary to the 2008 crisis, this time the banking system is not the part of the problem but rather part of the solution. Despite the uniquely adverse conditions, the government of New Democracy managed to launch and maintain on track significant reforms for the Greek financial system.
The reduction of the stock of NonPerforming Loans (NPLs) has been a top priority for the Greek government since its coming into office. This was achieved through the speedy design, adoption and implementation of the “Hercules” Asset Protection Scheme.
It proved that it is a systemic solution for the banking system, which enhances the NPL secondary markets and reinforces market transparency.
“Hercules” is a market-based solution, as funds for its operations are drawn from investors, and therefore does not impose any burden on Greek taxpayers.
Most importantly, “Hercules” demonstrated its resilience as it continued to operate successfully despite the acute pandemic crisis, thus reflecting the confidence of international investors in the prospects of the Greek economy” the article stresses.
You can read all about the reforms of the Greek financial system, the digital transformation of the Greek financial sector, the role of the Hellenic Financial Stability Fund and the reform of the Greek capital market in the January/February 2021 issue of Greek Business File, available here