It is now only a matter of time before the European Stability Mechanism (ESM) gives the green light for the utilization of the “hard core” of cash reserves, amounting to 15.7 billion euros, reserved in a special account of the Bank of Greece.
According to competent officials, the relevant approval is expected on December 2-3, paving the way for the utilization of this amount, not only this year but also in the next two years (2025-2026) for debt repayment.
Meanwhile, the early repayment of three more installments from the loan of the first memorandum (2026-2027-2028) is expected in mid-December. The amount that will have to be paid totals 7.935 billion euros, of which 5 billion euros will come from the so-called “cushion” of 15.7 billion euros.
This move is planned to be repeated both next year and in 2026, with Greece proceeding with new early repayments of installments, amounting to 5.3 billion euros every year. Following this policy, Greece will have paid installments corresponding to 2032 by the end of 2026.
5 billion euros per year
As sources with knowledge of the procedures explained to “N”, Greece will be able to utilize the “cushion” of 15.7 billion euros for the repayment of public debt, using 5 billion euros per year (from this year until 2026).
However, every year the country will have to follow the procedure it followed both this year and previous years. That is, at the beginning of Autumn, it should submit a relevant request for early payment so that, after the relevant approvals, it can proceed with the early payment of the installments before the end of each year.
The specific moves are aimed at continuing the downward trend of public debt as a percentage of GDP, reducing interest servicing costs and sending the message to the markets that the country can service its debt obligations.
Debt at 130% of GDP by 2028
Based on the Medium-term Fiscal-Structural Plan 2025-2028 that Greece submitted to the Commission, the goal is for the average annual debt reduction, during the four years covered by the plan, to reach 5.1 percentage points. This will result in the percentage of debt being reduced to 130% of GDP by 2028.
With the cash available amounting to approximately 47 billion euros, the Public Debt Management Agency (PDMA) has almost prepared the loan program for the next year. According to sources, it will not show significant differences compared to this year, that is, maintaining the presence in the markets through new issues, reissues of bonds and interest-bearing promissory notes.
