GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Daphne Kasimati, Afroditi Kazani and Ioanna Exarchou, Machas & Partners
Machas & Partners Law Firm 8 Koumpari 106 74, Athens Greece
Tel: +30 210 721 1100 Fax: +30 210 725 4750
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1. Loan Market Overview 1.1 The Regulatory Environment and Economic Background
with rates on consumer and mortgage loans also fol- lowing such a trend. While mortgage lending remains subdued, corporate lending has maintained strong growth at 12% year-over-year. 1.2 Impact of Global Conflicts Geopolitical tensions, particularly the war in Ukraine, turmoil in the Middle East, and rising trade protec- tionism, such as US tariffs, pose mainly external risks to Greece’s financial stability. While Greece’s direct exposure is limited, these factors could spill over through slower euro area growth, market volatility, and pressure on asset quality. The banking sector is more resilient than in the past and supported by EU funds and solid domestic demand, but the combined application of available microprudential and macro- prudential policy tools remains essential. 1.3 The High-Yield Market The high-yield bond market has played a critical role in shaping Greece’s financial market trends, particularly as the country has recovered from its debt crisis and gained investment-grade status. The high-yield market has offered legal entities the benefit of lower yields due to Greece’s recent credit upgrades. This has led to greater diversification in financing strategies, with companies issuing bonds to secure long-term financing and investors becom- ing more willing to take on corporate debt at higher returns. Additionally, the involvement of international investors in Greece’s high-yield market has increased, enhanc- ing liquidity and encouraging more sophisticated
Greece’s economy is expected to continue its growth trajectory in 2025, with a GDP growth rate projected at 2.3% by year-end, significantly above the euro area average; tourism and domestic consumption are expected to remain key contributors. Investment remains a crucial driver of Greece’s economic stability, particularly with the support of European Recovery funds, which continue to provide substantial liquidity for infrastructure, green, and digital projects. As of 2025, the NPL (non-performing loan) ratio of Greek Banks has improved to 3.1% due to the secu- ritisation transactions supported by the state guaran- tee programme “Hercules” (Hellenic Asset Protection Scheme – HAPS III) and secondarily to loan sales by the significant institutions. However, the high volume of loans held by servicers has increased, amounting to EUR74.8 billion (31.5% of GDP) at the end of 2024, due to additional securitisation and slow progress in the servicers’ workout processes, which weighs on the economy. In addition, the European Central Bank (ECB) has maintained a tight monetary policy to combat infla- tion, resulting in rising interest rates. Headline inflation in Greece averaged 3% in 2024, 0.6 purchasing power standard (PPS) above the euro area average and is projected at 2.8% in 2025. Disinflation has been con- strained by accelerating service prices and the uptick in electricity prices. In 2025, the average interest rate on loans to non-financial corporations stands at 6.5%,
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