“In recent days we have been experiencing a stock exchange crash in Athens related to bank stocks,” says Michalis Kosmopoulos, Partner at Drakopoulos Athens. “Share values have dropped significantly.”
Kosmopoulos reports that the general assumption is that the crash is related to the remaining NPL portfolios of Greek banks. “To solve the problem, the banks need to get rid of NPLs,” he says, adding that a government’s plan is expected to be released in the near future.
Kosmopoulos notes that the plummeting share prices was unexpected. “Everyone was assuming the big problems were over,” he says, referring to Greece’s recovery from the country’s widely-reported financial crisis by means of the financial aid programs supported by the EU and IMF which were completed in August 2018. Greece instituted the reforms mandated by the memorandum agreement and received the last bailout tranche, “so at this point, it is a question of to what extend Greece is able to plan its own financial policy.” He suggests that another bank bailout may become necessary after all. “It is to be seen,” he says, “whether we are on the path of growth or we are going backwards. We hope for the best, of course.”
In the meantime, everyone is looking forward to the May 2019 EU parliamentary elections and local municipality elections and the next general elections scheduled for September 2019. “The year of 2019 is full of elections,” says Kosmopoulos. “It seems there will be a government switch,” he says, pointing to the polls suggesting public support for the New Democracy Party. “Of course, we have almost a year to go,” he says, “so nobody can be sure what the situation will be yet.”
In the meantime, Kosmopoulos says, the legal market itself has been undergoing various changes. Earlier this year, new legislative initiatives were announced to incorporate a compulsory mediation stage in litigation involving traffic accident cases, facility law cases, medical liability cases, trademark and patent disputes.. The initiative has raised concerns, and the Greek Supreme Court has issued an opinion calling the law contrary to the constitution and to the fair trial principals. Thus, he reports, the new bill has been given an extension of 9 months for stake holders to evaluate the law, which he agrees “was the right thing to do” because “to file a lawsuit is, of course, both a constitutional and a human right.”
Another government initiative which has been “fiercely debated,” he says, involves the creation of two new courthouses in Athens. The Athens Bar Association held a referendum to vote on the initiative. “There was a huge rejection of this plan,” Kosmopoulos says, “and the government recently withdrew it.” According to him, “this was the government’s effort to deal with delays in justice, which cannot be resolved by adding courts and judges.” In his opinion, an increase in the number of courts will only increase the amount of frustration. “It would drive everyone crazy – running from one courthouse to another to meet deadlines and attend hearings.” Instead, he believes, e-justice may represent a better solution. “Hopefully, we will fix the issues soon with a system where everything is managed online.”