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Greek state cuts by 50% the interest rate it pays to citizens and businesses

The Greek state decided to cut by 50% the interest rate it has to pay to citizens and business due to delays in paying its debt. According to an voted amendment the interest rate is reduced to 3% from currently 6%.

In its statement to justify the cut the State Treasury notes that “apart from the fact that it is considered to be particularly high for the current fiscal conditions, it does not fit into the financial environment, resulting in a serious burden on the state budget taking into account also the slow pace of justice as well.”

Several cases of debt dispute are in Greek courts.

The new interest rate will be equal to the rate of the European Central Bank’s (MRO) main refinancing operations, which is currently 0, plus 3 percentage points.

The State Treasury’s report notes that this provision “also covers the cases pending at any stage and in the degree to which the claims of individuals for interest are deducted and calculated after a period of the first following month following the entry into force of the law enacted.”

Sadly, the Greek finance ministry “forgot” to reduce also the interest rate for four million debtors  who pay with delay their debts of even 500 euros to the state.

The interest rate for debts to tax offices, social security funds, and fines is at 8.76%, almost three times higher that the new state interest.

According to media, the state currently owes 2.149 billion euros.

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