The Greek government is moving forward with a legislative intervention on Swiss franc–denominated loans, arguing that the issue represents a genuine social and economic problem that cannot be resolved solely through court rulings or ad hoc bank restructurings. According to sources at the Ministry of National Economy and Finance, the initiative responds to a long-standing distortion that continues to weigh on thousands of households. The plan was first reported by Euro2day.gr, which disclosed details of the amendment included in a broader bill.
Most Swiss franc loans in Greece were granted between 2005 and 2009, at a time when international financial conditions were very different. There were no credible forecasts of a sharp appreciation of the Swiss franc, while interest rates on the currency were consistently lower than those on the euro. From 2008 onward, the interest rate differential averaged more than one percentage point in favor of the Swiss franc. These assumptions collapsed during the global financial crisis, when the Swiss franc surged against the euro. The appreciation became so extreme that the Swiss National Bank imposed a ceiling on the exchange rate at 1.20 per euro, which it maintained for years. When the cap was suddenly lifted, the exchange rate deteriorated further and has remained unfavorable ever since, currently standing at around 0.94.
The result was that thousands of borrowers, despite making repayments for many years, ended up owing more in euros than the amount they had originally borrowed. This was driven by exchange-rate risk that borrowers could not realistically have anticipated at the time the loans were taken out.
The government insists that it is not imposing a mandatory solution. Borrowers remain free to keep their loans in Swiss francs if they believe the euro–Swiss franc exchange rate may move in their favor in the future, allowing them to continue benefiting from the currency’s low interest rates while bearing the exchange-rate risk. For those who want to exit that risk, however, the legislation provides concrete and binding options that banks are obliged to accept.
One route is through Greece’s out-of-court debt settlement mechanism, which applies to non-performing loans. In this case, the restructuring outcome produced by the system becomes mandatory for creditors specifically for Swiss franc loans, a more favorable treatment than applies to comparable euro-denominated loans. The process is automatic upon application by the borrower, fully digital, and results in the conversion of the debt into euros under predefined terms.
The second route targets borrowers who are still servicing their loans, or who have entered a restructuring arrangement and remain current on payments. These borrowers can convert their loans into euros at an improved exchange rate, leading to an immediate reduction of the outstanding principal. The relief is tiered according to income and asset criteria, ranging from 15 percent to as much as 50 percent for the most financially vulnerable households. The converted loan carries a fixed interest rate between 2.3 percent and 2.9 percent for the remainder of its term, significantly lower than rates on new mortgages today. Borrowers are also given the option to extend the loan maturity by up to five years in order to further reduce monthly instalments.
Government officials stress that the scheme is designed to enhance stability, transparency and social fairness. It eliminates exchange-rate risk, reduces principal balances, and locks in low, predictable interest rates until maturity. Borrowers gain full clarity over how much they will pay and for how long.
Crucially, the cost of the intervention does not fall on the state. Banks are expected to absorb the entire burden, and the government argues that the measure is fiscally safe. A large share of Swiss franc loans has already been included in securitisations under Greece’s “Hercules” asset-protection scheme, which carries state guarantees. According to the finance ministry, the conversion framework is capital-neutral for those securitisations, does not undermine their approved business plans and does not increase the risk of state guarantees being called.
The government also underlines that the legislative move does not challenge the legality of Swiss franc loan contracts. Greek courts, the Court of Justice of the European Union and the European Court of Human Rights have all repeatedly upheld their validity. The intervention is presented instead as a policy choice that acknowledges a gap between legal finality and social reality. In practical terms, the framework offers borrowers either a binding restructuring through the out-of-court mechanism for non-performing loans or a tailored conversion for performing loans outside that process. In both cases, debts are converted into euros at preferential exchange rates and fixed interest terms. For the most vulnerable borrowers, the exchange-rate improvement can reach 50 percent, while even those who do not qualify under income or asset criteria receive more favorable terms than the prevailing market.
Around 57,000 Swiss franc loans were originally issued in Greece, with a total value of approximately CHF 14.1 billion. Today, roughly 40,000 loans remain outstanding, either on bank balance sheets or managed by loan servicers. The total cost to banks will depend on how many borrowers choose to participate, but if take-up is universal, estimates suggest it could exceed €600 million.
Unlike approaches adopted in some other European countries, the Greek solution avoids across-the-board measures. Officials note that loan contracts and court rulings differed significantly across jurisdictions, and that in Greece the courts ultimately ruled in favor of the banks. Against that backdrop, the government says it has opted for a targeted, socially differentiated intervention that aligns with judicial decisions while addressing the lingering economic and social consequences of the Swiss franc shock.
