Greece Plans Early Repayment of Bailout Loans to Shed 'Most Indebted' Title

08:34 12/4/2025 - Πηγή: iEfimerida

Greece is preparingto repay the remainder of its first bailout loans by 2031, a fulldecade ahead of schedule, according to two senior governmentofficials cited by Reuters.

The move aims toreduce the country’s debt burden and move beyond a decade ofeconomic turmoil.

The repayment willproceed gradually, with annual payments of €5 billion, allowingGreece to retire the loans by 2031 instead of 2041.

Officials

said thecountry wants to shed its reputation as the most heavily indebtedmember of the European Union.

“The goal is torepay, in full and ten years early, the remaining loans from thefirst rescue program,” one official said, speaking on condition ofanonymity.

The government plansto use a €37 billion cash reserve, stronger-than-expected budgetsurpluses, and new bond issuances to finance the effort.

Finance MinisterKyriakos Pierrakakis did not comment on the specifics of therepayment timeline but confirmed that early repayment is part of thegovernment’s fiscal strategy.

“We are confidentthis strategy will allow Greece to shed the label of the EU’s mostindebted country in the coming years,” Mr. Pierrakakis said in aninterview. “It’s a realistic and achievable goal,” he added.

The move comes asthe Greek economy continues to recover from the financial crisis thatbegan in 2009 and triggered years of social unrest, driven by harshausterity measures.

Greece receivedthree bailout packages totaling €280 billion between 2010 and 2015from eurozone partners and the International Monetary Fund.

Greece repaid theIMF in 2022 and, by the end of 2024, had paid off €22 billion ofthe €53 billion owed from the first bailout.

Officials estimatethat Greece’s debt will fall to 135% of GDP by 2027, below Italy’sprojected debt of 138% in 2026.

Greece has alreadyreduced its debt-to-GDP ratio by more than 50 percentage points since2020, bringing it to 147% in 2023.

Despite theprogress, many Greeks still face challenges with lower wages andinflation.

However, theeconomy is projected to grow by 2.3% this year—twice the eurozoneaverage—as the country maintains fiscal discipline, even as othermajor EU economies increase defense budgets and public spending.

The second officialnoted that for the first time since exiting the third bailout in2018, Greece’s total debt will decrease in absolute terms in 2024,falling to €365.8 billion.

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Greece Plans Early Repayment, Bailout Loans,Shed Most Indebted Title