The gradual reduction of cash reserves, which amounted to 36.5 billion euros at the end of March, is included in the 2024-2025 Stability Programme submitted by the National Economy and Finance Ministry to the European Commission.
As stated in the stability programme “maintaining a high level of cash reserves, almost 36.5 billion euros at the end of March 2024, contributes significantly to achieving low refinancing costs and ensures the fulfillment of medium-term commitments in the field of debt.” However, “over the next few years, cash reserves will be gradually reduced, with the aim of paying off the balance of the public debt.”
By the end of the current year, the European Stability Mechanism (ESM) is expected to give the green light for the gradual disbursement of the 15.7 billion euros deposited in a special account at the Bank of Greece and come from a large degree from its own loan (9 billion euros) and bond issues.
Early repayment of 15.9 billion euros of the 32.3-billion-euro loan
After paying this year’s third double installment of 5.3 billion euros, Greece will have repaid 15.9 billion euros of the 32.3-billion-euro loan early. Therefore, the remaining amount will stand at 16.4 billion euros.
For 2024, the Public Debt Management Agency (PDMA) has planned to proceed with:
- the reduction of borrowing through interest-bearing promissory notes in order to extend the average debt repayment period, which is currently 17.7 years. The relevant process has already started with the aim to reduce the amount of interest on promissory notes from 11.5 billion euros at the end of 2023 to approximately 8 billion euros at the end of the year.
- the early repayment of old government bonds that are close to maturity and their replacement with new issues. It is worth noting that PDMA has proceeded with bond reissues and will continue during the year. This particular strategy started last year as new titles are more attractive to investors and help in their participation in the issuances.
