Investment Rating - The report does not explicitly provide an investment rating for the judicial system in Greece, but it suggests that enhancing judicial efficiency could lead to significant economic gains, indicating a positive outlook for potential investments in judicial reforms [6][63]. Core Insights - Greece's judicial system efficiency is among the lowest in the EU, adversely affecting economic performance. The crisis period led to a massive increase in demand for judiciary services due to business and personal insolvencies, which the supply of judicial services could not adequately meet [6][10]. - Policy simulations indicate that judicial reforms could yield substantial gains in investment and productivity, essential for fostering higher economic growth and resilience [10][63]. - The ongoing judicial reforms aim to address key imbalances, focusing on court reorganization, digitalization, and training, but require swift execution to achieve desired outcomes [10][64]. Summary by Sections A. Introduction - The new insolvency framework has reduced the non-performing loan (NPL) ratio from 40% in 2019 to 3% in 2024, but its implementation is hindered by an inefficient judicial system [11]. - Distressed debt amounted to around €70 billion at the end of 2024, representing approximately 30% of GDP [11]. B. Court System in Greece - The civil court system in Greece consists of three tiers: 57 courts of first instance, 19 courts of appeal, and the Supreme Court [16]. - There is a limited level of specialization in civil courts, with judges rotating every four years, which hampers the development of expertise in insolvency matters [19]. C. Judicial System Efficiency - Greece has one of the lowest judicial efficiency rates in the EU, with a clearance rate below 100% for civil and commercial cases, leading to significant backlogs [25]. - The average disposition time for civil and commercial cases in Greece is approximately 1,200 days, compared to the EU average of 446 days [25]. D. Drivers of Judicial Efficiency - Demand for judiciary services surged during the Global Financial Crisis (GFC) and the European Debt Crisis (EDC), leading to congestion in the system [30]. - The supply of judicial services has been declining, with inadequate human and financial resources contributing to low resolution rates [38]. E. Impact of Judicial Efficiency on Debt Enforcement and Insolvency Proceedings - Delays in obtaining court orders for debt enforcement can take several years, significantly impacting creditors [48]. - The new insolvency framework's implementation is challenged by procedural inefficiencies, particularly in corporate insolvency cases [50]. F. Impact of Judicial Efficiency on Economic Performance - Judicial efficiency affects economic performance through investment, productivity, and credit markets, with better contract enforcement linked to higher investment levels [51]. - Cross-country studies indicate that improved judicial efficiency correlates with increased foreign direct investment and enhanced firm productivity [53]. G. Conclusions and Policy Implications - Enhancing judicial efficiency is crucial for boosting economic performance, with ongoing reforms prioritizing court reorganization and digitalization [63]. - A multi-pronged approach is necessary to address both quantitative and qualitative aspects of judicial efficiency, including the establishment of commercial courts for specialized judges [64][66].