Greece is seeking to reduce its debt-to-GDP ratio below that of Italy by the end of 2026, supported by a series of early debt repayments aimed at accelerating the country’s post-crisis fiscal consolidation.
The government is moving forward with two major early repayment operations this year.
On June 15, Greece completed the early repayment of €6.94 billion in Greek Loan Facility (GLF) loans from its first bailout programme, originally due between 2029 and 2035. The operation had received approval from the European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF).
A second repayment of around €3 billion in EFSF loans is scheduled for September, according to officials. Total outstanding EFSF exposure stands at about €131 billion.
Debt reduction strategy
The latest transaction marks Greece’s eighth early debt repayment operation since 2019. Once the planned 2026 transactions are completed, Greece will have repaid approximately €36.24 billion ahead of schedule, with around €19.4 billion remaining under its current early repayment framework.
Officials estimate the June repayment will generate about €100 million in annual interest savings. Government figures suggest that every €1 billion in early repayment reduces interest costs by roughly €30 million per year.
The authorities say the strategy is intended to strengthen Greece’s standing in international debt markets and reduce long-term financing costs.
Fiscal outlook
The government has drawn down the remaining portion of its €15.7 billion cash buffer, originally maintained as a liquidity safeguard after exiting its bailout programmes in 2018. The funds have been used exclusively for early debt repayment operations.
According to Greece’s medium-term fiscal plan submitted to the European Commission, public debt is projected to fall to 136.8% of GDP by end-2026, from 146.1% in 2025. European Commission forecasts place the figure higher, at 140.7%.
From its pandemic-era peak of 209.4% of GDP in 2020, Greece’s debt ratio is projected by the government to have declined by more than 70 percentage points by end-2026.
Read the News today and stay informed about the latest news.
Follow Skai.gr on Google News and be the first to know all the news.