Swiss Franc (CHF) Loans: from divergent case law to legislative resolution
Loans denominated in Swiss francs (CHF) were a distinct feature of the Greek retail lending market in the 2000s, typically marketed on the basis of comparatively lower interest rates versus euro loans. The sharp CHF appreciation following the Swiss National Bank’s decision to discontinue the EUR/CHF minimum exchange rate on 15 January 2015 materially increased borrowers’ euro-equivalent debt service and outstanding balances.
Court rulings
Greek courts addressed CHF-loan disputes through a body of case law that did not converge on a single, uniform solution. Indicatively, the Court of Appeal of Thessaloniki (decision 1663/2018) applied the Greek Civil Code doctrines on unforeseen change of circumstances and good faith (articles 388 and 288) in the context of CHF/EUR exchange-rate developments. In contrast, the Plenary Supreme Court (Areios Pagos) in decision 4/2019 adopted a different approach to the scrutiny of CHF foreign-exchange risk allocation terms.
2025 legislative reform: what the framework actually does
Article 128 of law 5264/2025 introduces a statutory, time-limited mechanism for the conversion of CHF-denominated loan exposures into euro, applicable to both non-performing and performing (or restructured-and-performing) loans, subject to the conditions set out in the statute. The scheme applies to individuals, self-employed professionals and sole proprietorships. The conversion is not market-negotiated. The current exchange rate is defined as the ECB reference rate published on the date the borrower submits the relevant application, and conversion is effected with zero commission.
Mandatory conversion and economic recalibration (principal and interest)
First, the mechanism directly impacts the euro-denominated principal through statutory improvements to the conversion rate (by 15% to 50%, depending on category). These improvements are prescribed exhaustively by Article 128 and apply by reference to the ECB reference rate as defined in the law. Where the debt has been reduced pursuant to a prior restructuring agreement, the preferential exchange rate is applied to the outstanding amount as it stood immediately before that restructuring, less any capital repayments made between the restructuring date and the date of application.
Second, following conversion, Article 128 provides for fixed euro interest rates for the remaining term of the loan, set at 2.30%, 2.50%, 2.70% or 2.90% (depending on the borrower category). The statute further clarifies that these stated rates do not include the levy under law 128/1975. Individual borrowers with a certified disability of at least 67% are automatically classified under Category 1.
Third, the framework substitutes both exchange-rate uncertainty and the continuation of CHF-specific litigation pathways with a single, legally determined outcome, including express consequences for pending proceedings and enforcement (see below).
Non-performing CHF loans: linkage to the out-of-court mechanism and creditor binding effect
For CHF loans that are at least 90 days in arrears at the relevant time, Article 128 links access to the out-of-court debt settlement mechanism of Law 4738/2020 with a statutory rule of deemed creditor consent in the context described by the provision (including financial institutions, the State and social security entities), without requiring proof of specific income or asset criteria for that CHF exposure. For performing or restructured exposures, conversion is effected either through a digital platform operated by the General Secretariat for the Financial Sector (Categories 1 to 3) or directly with the lending institution (Category 4). Following conversion, borrowers may request an extension of the loan term for up to five (5) years, subject to a maximum borrower age of 80 years and provided the extension does not exceed 50% of the original loan term.
Continuity of security and contractual structure
Article 128 expressly provides that personal and in rem security securing CHF obligations continues to produce its legal effects after conversion of the underlying debt into euro and contemplates the possibility of a non-constitutive amending deed. It also allows for a registry note to be made in public books relating to mortgages/pledges to reflect the currency conversion.
The conversion is characterised as a contract modification, not a new obligation, and reversion to CHF is excluded. Guarantors, co-debtors and third parties that have provided collateral may consent to the restructuring by means of a simple written declaration addressed to the creditor. In the absence of such consent, the restructuring produces effects solely vis-à-vis the borrower, and the remaining obligors do not benefit from the preferential terms of the scheme.
Elimination of litigation uncertainty and consequences of post-conversion default
Upon inclusion in the scheme, Article 128 provides for the discontinuation of pending judicial proceedings, the cessation of prior restructuring arrangements, and the termination of enforcement measures in the manner described in the statute. At the same time, the statute sets a key incentive/discipline mechanism: if the loan is subsequently terminated due to non-performance after inclusion, the borrower becomes liable for the euro amount that would have resulted from conversion at the standard ECB reference rate (i.e., without the statutory improvement).
Entry into force and application window
Article 128 provides for a six-month window during which the conversion option may be exercised. As regards entry into force, Article 128 states that it begins within two months from publication, except for paragraph 7 (Category 4 applications).
Conclusion
Article 128 of law 5264/2025 establishes a rule-based statutory recalibration of CHF loan exposures through (i) conversion into euro by reference to the ECB rate, (ii) statutorily defined preferential conversion adjustments, (iii) fixed euro interest rates as set out in the law, and (iv) a procedural framework that materially reduces CHF-specific litigation and enforcement uncertainty by channelling outcomes into a legally predetermined mechanism.