Greece could repay by 2029, two years ahead of schedule, the €53 billion ($61 billion) in loans it received under its first bailout programme, as strong fiscal performance and economic growth give Athens greater scope to reduce public debt, two officials told Reuters on Wednesday.
Greece came close to leaving the eurozone at the height of its 2009-2018 economic crisis and carried the highest public debt burden in the eurozone for the past two decades. Its debt ratio has since fallen by more than 60 percentage points, reaching 145.9% of GDP last year. It is expected to fall below Italy’s ratio this year, with Greece forecast to reach 136.8% of GDP.
Greece accelerates first bailout loan repayments
Athens announced last year that it planned to repay by 2031 the bilateral loans that eurozone countries provided in 2010 through the Greek Loan Facility.
The facility formed part of the first of Greece’s three bailout programmes, which provided around €289 billion in total assistance. Greece had planned to complete repayment 10 years before the loans’ final maturity, through annual instalments of around €5 billion.
Earlier this year, however, Greece made a larger-than-planned repayment of €6.9 billion, reducing the outstanding balance to €19.5 billion.
“It is very likely that we will fully repay the first bailout programme loans by 2030 or even by 2029, instead of 2031,” one official told Reuters.
A second source confirmed that Greece expects to complete the repayment during 2029-2030 and said Athens could accelerate early debt repayments further in the coming years if conditions allow.
Strong fiscal performance gives Athens more room
Stronger-than-expected fiscal performance and cash reserves of around €32 billion have given the government greater flexibility to make larger early repayments.
Economic growth and efforts to combat tax evasion have helped strengthen government finances. The Greek economy is growing at an annual rate of around 2%, outpacing the eurozone average.
Greece expects to record a primary surplus of around 4% of GDP this year, almost twice its original forecast.
The first official said Greece would repay at least €5.1 billion early in 2027. The official also said Athens expects a credit-rating upgrade after the parliamentary elections expected next year.
S&P, Fitch and DBRS Morningstar currently rate Greek debt at BBB, while Moody’s rates it Baa3.
Greece plans further bond issues
Greece already borrows at a lower cost than Italy and France and plans to raise between €7 billion and €8 billion next year through new benchmark bond issues and the reopening of existing securities.
The planned issuance will include a 10-year bond, alongside reissues of existing government bonds.
The accelerated repayment strategy reflects Greece’s broader effort to reduce its debt burden and strengthen its position in financial markets after more than a decade of sovereign-debt crisis.
