Greece’s Supreme Court has overwhelmingly ruled that some 70,000 people who had taken out loans in Swiss francs will have to repay them at the current exchange rate and not that at the time they were issued by the banks.
Due to a currency appreciation of the Swiss franc, many borrowers have seen the cost of their loan increase despite having paid regular instalments in repayments.
The court ruled that borrowers were not, as they claimed, misled by the banks, which were deemed to have sufficiently warned customers of the dangers involved in foreign currency loans.
According to the 4/1919 ruling of the Supreme Court, published yesterday, the condition for the loans to be repaid at the current exchange rate of the euro was declarative and not subject to abusive power.
The decision is a defining one considering that the Supreme Court seems to adopt the views of banks and takes away the right of borrowers to ask for installments to be redefined at the initial franc and euro exchange rate.
The case concerns a bankruptcy appeal by a female loan taker against a ruling not in her favour by an Appeals Court in Salonica.
In the meantime, the Parliament’s plenary will discuss the Swiss franc loan collective action on May 20. And many district and appeal courts in Greece have suspended their rulings on such cases pending the outcome of the plenary debate.
The some 70,000 borrowers had taken loans at a nominal value of around 7 billion euros. Swiss franc loans were dominant between 2006-2009 when the euro/franc rate was high – specifically between 1.55-1.65.