Debt-easing law ‘against Constitution’

Greek courts have deemed the regulations of the so-called Katseli Law “unconstitutional.” The 2010 law concerns money owed by overindebted households to the tax authorities, the social security funds and the local authorities, and in some cases allows for the write-off of certain debts.

The courts responsible for thousands of applications from citizens seeking protection in the law’s provisions have decided in a multitude of cases that the regulations are “clearly unconstitutional” and “arbitrary.” These crumbling regulations are included in the 2015 amendment to the 2010 law informally named after former economy minister Louka Katseli. That legislation gave thousands of borrowers with arrears to banks the opportunity to restructure their debts to social security funds and tax or local authorities or even have them written off.

Greek justices warn that if the law is applied in full, at least regarding social security funds, it will be the last straw for the already creaking pension system. Courts have also criticized the regulations in relation to the principle of the equality of citizens, noting that the law is constitutionally unacceptable because it shifts the burden to citizens who continue to pay their taxes and contributions.