In a much-anticipated move, the boards of directors of the European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) have approved Greece’s intention to repay its loans early.
According to the ESM and EFSF loan agreements with Greece, with early repayment to other creditors, a proportional amount of the financial assistance provided becomes immediately due and payable. Thanks to the exemptions granted, Greece can repay early loans under the GLF facility (bilateral loans from Eurozone countries), without being obliged to make an early repayment to the two institutions.
“Greece continues to make significant strides in its economic growth. It is one of the fastest growing economies in the EU and has recovered investment grade status. The planned early repayment of the GLF loans is another positive signal for financial markets and demonstrates the improvement in Greece’s fiscal position. The repayment will lead to savings for the Greek budget and will also strengthen its liquidity management. These are notable developments for the ESM and the EFSF, which hold around 54% of Greece’s public debt. Our interests are aligned and we will continue to support the Greek authorities in their efforts to enhance long-term growth and debt sustainability,” said ESM Managing Director and EFSF CEO Pierre Gramegna.
We will repay loans of 7.9 billion euros
The exemptions were granted in response to an official request from the Greek government, which proposed early repayment of loans amounting to 7.935 billion euros, initially scheduled to be repaid in the period 2026-2028.
The Greek Loan Facility (GLF) was part of the first financial support program for Greece, agreed in May 2010. It consisted of bilateral loans from 14 eurozone countries, amounting to 52.9 billion euros, of which 39.5 billion euros remain outstanding.
It should also be recalled that Greece completed the repayment of its loans from the IMF two years ahead of schedule in 2022 and made the first early repayment of GLF loans in 2023.
