The regulation will mainly concern unsecured consumer loans, as well as credit card debt.
The Greek government is moving to introduce legislation to strengthen consumer protection in the retail banking market by capping the total repayment amount on consumer loans of up to €100,000.
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Greek Prime Minister Kyriakos Mitsotakis presented the plan as part of his weekly review of the government’s work, stressing the need to curb abusive practices and “fine print” in lending contracts.
Under the proposal, the total amount a borrower will be required to repay, including interest and fees, will be capped at a level 30% to 50% above the capital the lender borrowed, "as is the case on average in other European countries," the Prime Minister said in a Facebook post on Sunday, adding that "These are regulations that I believe create a clearer and fairer framework for everyone".
The cap will mainly apply to unsecured consumer loans, as well as credit card debt, where high interest rates and complex fee structures have been recorded over time.
A 14-day cooling-off period from the signing of the contract is also envisaged, strengthening borrowers’ rights and improving transparency.
A recovering market, but at a high cost
The intervention comes at a time of gradual recovery in consumer credit in Greece, after years of contraction caused by the debt crisis.
Demand for consumer credit in Greece has strengthened since 2022, while borrowing costs remain high compared with other loan categories.
Interest rates on consumer loans often exceed 10%, while on revolving credit products, such as credit cards, can exceed 14%.
The combination of rising demand and high interest rates is exacerbating concerns about over-indebtedness, particularly for the most vulnerable households.
Banking practices under scrutiny
The new initiative is part of a wider government effort to tackle bank practices that burden consumers.
In recent years, issues that came under scrutiny, included charges and terms that are not easily understood by customers, the high cost of basic banking services such as transfers and account maintenance, and limited competition in retail banking.
At the same time, the government has put pressure on banks to raise deposit rates during the period of rising interest rates, accusing them of being slow to pass on the benefits to savers.
Greek banks have returned to stable profitability in recent years, following extensive consolidation and a reduction in non-performing loans.
