Greece to fast-track repayment of €5b in eurozone bailout loans

Greece is planning an early repayment of up to €5 billion ($5.34 billion) of bailout loans to eurozone countries this year, two government officials told Reuters on Tuesday.

The country seeks to regain economic stability following a decade-long debt crisis.

During the crisis, Greece borrowed approximately €280 billion from the eurozone and the International Monetary Fund (IMF) under the condition of implementing stringent austerity measures.

These measures led to significant cuts in public sector wages and pensions, sparking years of protests. However, the Greek economy has shown signs of recovery in recent years, enabling a series of early loan repayments.

An anonymous official revealed that the government plans to repay between €2.5 billion and €5 billion to eurozone countries, likely in the second half of the year.

This repayment is expected to facilitate more bond issues without increasing the country’s debt, while also adding liquidity to the Greek bond market. Currently, about 70 per cent of Greece’s debt is held by its official lenders, the eurozone and the European Central Bank (ECB).

Greece recently regained its investment grade after 13 years in the “junk” category, attracting strong demand from foreign investors for its bond issues. With the planned payment this year, Greece will have repaid about €15 billion–€17 billion from the first bailout loans.

In 2022, Greece paid off the IMF two years ahead of schedule, and in 2023, it repaid €5 billion of loans to eurozone countries. Since the expiration of the country’s third bailout in 2018, Greece has relied solely on debt markets for its borrowing needs.