Greece’s Public Debt Management Agency (PDMA) is planning another early debt repayment, expected to take place in 2025, according to sources, before the previous early repayment of 7.93 billion euros in bilateral loans (Greek Loan Facility) from the first bailout, is completed.
These sources indicate that the planned repayment of the aforementioned loans—initiated at the beginning of 2024—will be completed by mid-December, after which preparations for the next repayment will begin.
This subsequent debt repayment is expected to be completed by Sept. 2025, with an amount of at least 5 billion euros. The current repayment has already received approvals from the Euro Working Group (EWG), as the same sources have mentioned, so no hindering issues are anticipated.
The Greek side seems to have already shifted its focus towards the next repayment of bilateral loans (GLF), aiming to improve the profile of Greece’s public debt. However, Greece’s debt profile is set to face a setback due to a forthcoming adjustment from Eurostat, which has notified Greek authorities of its plans to revise the country’s public debt figures.
The revision will involve adding 12 billion euros of deferred interest, from a total of 24 billion euros, tied to the 90 billion euros loan Greece received from the European Financial Stability Facility (EFSF) in 2012.
Even though during the 2018 debt settlement agreement, Greece’s creditors had agreed that the total amount of deferred interest from this loan would have a grace period until 2032.
Nevertheless, Eurostat appears intent on making this adjustment, which will affect Greece’s debt-to-GDP ratio. The result will be a 4.8 percentage point increase in last year’s debt, impacting the figures for the coming years as well.
In order to accelerate the reduction of Greek public debt, the PDMA plans to use cash reserves both in 2025 and in 2026, while also reducing the European Stability Mechanism (ESM) buffer. The goal is to repay old bailout-related debt, such as the bilateral loans.
