The risk in the Hercules securitization, which will be approved in the future, should be equally distributed between the state and private individuals so as not to burden the public debt, while it remains undecided whether the same will still apply to securitizations. . In this case, it is assumed that most of the relevant state guarantees, 18 billion euros, will be registered as public debt.

Eurostat published criteria last week on the basis of which loan securitization guarantees such as Hercules will or will not be listed in public debt. In the preceding months-long negotiations among member states, the Eurostat view prevailed – not an overwhelming majority of the 27 member states and despite the opposite opinion of institutions such as the ESM and the European Central Bank – that these guarantees should be written in debt. The position of the Greek side was that they should only be registered when they are confiscated, and in any case referred to the fact that before the commissioning of “Hercules” there was an extensive dialogue with public institutions and an agreement was reached, without any one of the parties raising the issue of registering public debt guarantees.

In its decision last week, Eurostat took a step towards “relaxing” contrary to its initial positions. Whereas he originally established three criteria for an equal distribution of risk between private individuals and the state, of which two had to be met in order for guarantees not to be taken into account in debt, now he has added one more criterion out of all four, as long as he satisfies one.

According to the Greek side, after this development, it is assumed that the new securitizations awaiting the guarantee of the Greek state have already been adjusted or will be adjusted accordingly, so that the problem of debt burden does not arise. But this is only about 1.5 billion and could reach 2 billion.

The big question is what will happen to the securitization, which received 18 billion euros in guarantees from the Greek state. As for them, the Greek side argues that they should be removed from the list, because when they were introduced, Eurostat did not raise any questions.

Eurostat is expected to decide in the near future whether the rules will apply to previous securitizations. This is considered the most likely scenario. In such a case, ELSTAT undertakes to investigate the securitizations carried out one by one to determine whether they meet at least one of the four risk allocation criteria. In the worst-case scenario, which is considered likely, all old securitizations will be written into debt, weighing it down by 18 billion euros or 9% of GDP.

This has no fiscal effect, as the guarantees will not actually expire, so the interest must be paid. It’s just that the process of de-escalation of public debt will slow down. However, in practice, securitizations are far behind targets (see yesterday’s “K”), so the fiscal implications will show up at some point. ODDIX calculated in its debt sustainability analysis a forfeiture of guarantees of 40% over the next seven years.