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EU consents Greece's plan to reduce bad loans

EU consents Greece plan to reduce bad loans

The European Commission on Thursday approved a Greek plan to cut bad loans by up to 30 billion euros in the country's banks after it was confirmed that it had not violated any of the government's aid rules.

"The European Commission has found that Greek plans to support the reduction of non-performing loans to Greek banks are free of any government assistance," the Commission said in a statement.

"The state's risk will be limited because the state guarantee applies only to the top tranche of securities sold by the securitization company," the Commission added.

This scheme, called Hercules Asset Protection Scheme, aims to reduce the volume of bad or non-performing loans affecting Greek banks, without distorting the market through government subsidies.

The plan aims to reduce bad loans by nearly 80 billion euros, which accumulated due to the financial crisis that has shrunk the Greek economy by a quarter.

As of 10:18 GMT, the euro traded higher versus the U.S. dollar at $1.1029, the highest level since September 20, extending its advance for a second consecutive session.

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