Post-Crisis Corporate Insolvency and Creditor Rights Greece: An Assessment of the Post-Crisis Corporate Insolvency Framework

The chapter notes that the crisis has pushed Greek business insolvency and creditor rights law into a state of flux and almost constant “reform”, without a guiding paradigm; insolvency neither was, nor was perceived to be, an efficient instrument for redressing the microeconomic causes of business failure. The estimated numbers of insolvency proceedings versus the number and amount of NPLs show that insolvency proceedings have become practically irrelevant as a debt recovery path. The reasons are structural and institutional, deriving both from the low efficiency and effectiveness of the legal framework and from the inadequacy of incentives to use and, thereby, improve it both explicitly, through reform, and implicitly, through the development of jurisprudence. The liberalization of the market for bank credit management and acquisition has the potential to change the dynamics, by introducing a large number of competing agents exercising creditor rights and raising their voice in favor of reforming the law towards more efficiency and effectiveness.