The green light for the extension of Hercules until 30 June 2025 and the increase of its budget by €1 billion was given by the Commission. The aim of the program is to facilitate securitisation and the removal of non-performing loans from banks' balance sheets, the European Commission said in its statement.

"Under the scheme, private special purpose vehicles buy non-performing loans from banks and sell securities to investors. The state provides a public guarantee for the less risky, high-priority securities of the securitisation entities. In return, the state receives a remuneration in line with market conditions. The remaining securities are either distributed to existing shareholders or sold to private investors,' it stresses.

It will be recalled that the Commission initially approved Hercules in October 2019 for a period of 18 months, which was subsequently extended until October 2022. After its expiry, the program was reintroduced in November 2023. The extension approved today extends the duration of the scheme until 30 June 2025. Also, the total budget of the scheme will be increased from €2 billion to €3 billion.

"The scheme has been instrumental in reducing non-performing loans in the Greek banking system from around 30% at the end of 2020 to less than 5% in June 2024. The extension will allow the less important Greek banks to benefit from Greece's positive economic outlook and bring their asset quality to more manageable levels, like the larger banks. The non-confidential version of the decision will be published under case number SA.116229 in the State Aid Register on the Commission's competition website once the confidentiality issues have been resolved," the Commission concludes.