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October 16, 2025Open Access

The Effective Policy Framework that Helped Greek Banks to Decrease Non-Performing Loans Ratio to Single Digits

Key Points

The reduction in non-performing loans ratio to single digits indicates successful stabilization of Greek banks.
After a 25% GDP drop and 25% unemployment, significant fiscal austerity measures were implemented to tackle economic issues.
This analysis investigates the policy framework introduced by the Greek government to address the non-performing loans crisis.
The findings highlight the importance of targeted economic measures in mitigating financial instability during crises.

Abstract

In early 2010, Greece’s financial condition was unsustainable, necessitating the implementation of ambitious economic adjustment programs. The fiscal austerity measures launched by the Greek government in agreement with its official creditors ( IMF, ECB and European member states) led to a rather deep recession as GDP dropped by 25% and unemployment peaked at 25%. Households’ income, corporations’ profit, as well as their debt-paying ability decreased significantly leading to a huge amount of non-performing loans (NPLs). This paper provides a complete analysis of the measures introduced by the Greek government to stabilize Greek banks and reduce NPLs ratio at single digits.

The Effective Policy Framework that Helped Greek Banks to Decrease Non-Performing Loans Ratio to Single Digits

Key Points

Abstract

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