The Greek Government is proceeding with the early repayment of three installments of the bilateral loans from the first bailout package on Friday Dec. 13. The estimated amount being paid is 7.935 billion euros.
The early repayment of the Greek loan will be made using 5 billion euros from the cash buffer that the ESM has “unlocked,” while the remaining 2.935 billion euros will come from Greece’s “free” cash reserves.
Greece had already repaid 5.29 billion euros in 2023 from the Greek Loan Facility (GLF) and fully settled its debt to the IMF in 2022. The latest repayment is expected to reduce the overall debt and improve the country’s creditworthiness, as Greece has now returned to investment-grade status.
The Ministry of National Economy and Finance aims to pay off a significant portion of these loans by 2030, well ahead of the 2041 timeline originally set.
As noted by the rating agency Scope, when announcing the upgrade of Greece’s credit rating, the country benefits from its efforts to restructure its economy. The ongoing momentum of reforms continues to drive debt reduction.
The agency’s report highlighted that Greece has the highest debt-GDP ratio in the Eurozone and the second-highest in the world, after Japan.
However, the reduction of Greece’s debt by 57 percentage points is considered the fastest in the world, paving the way for further upgrades from credit rating agencies.
Recently, Athens secured approval from its major creditors (ESM and EFSF) for this initiative. The agreement will relieve the country of interest payments totaling about 150 million euros and will allow Greece to use part of its 15.7 billion euros security buffer, which was established at the request of its creditors in 2018.
This buffer, which burdens the state budget with interest payments every year, has not yet allowed Greece to fully repay it.
