In the direction of the early repayment of expensive loans that the country took on as part of the memoranda, the Ministry of National Economy and Finance and the Public Debt Management Agency (PDMA) will continue their actions in 2025.
These actions will be taken depending on the prevailing market conditions, and as officials from the Ministry emphasize to the Athens News Agency (ANA-MPA), the goal will be twofold: on one hand, to reduce the cost of servicing interest, which, however, is relatively small, amounting to tens of millions of euros over a three-year period. On the other hand, the main aim is to send a strong signal to international markets regarding the position and capabilities of the Greek economy.
The main part of the plan involves continuing the early repayment of Greece’s bilateral loans with eurozone countries, so that by 2030 a large portion of these loans will be repaid, much earlier than the originally scheduled full repayment in 2041. This will be done by making annual payments of €2.645 billion each year, while loans from the European Stability Mechanism (ESM) will be repaid by 2060, and loans from the European Financial Stability Facility (EFSF) by 2070.
This year, these actions, according to the official schedule, will be completed by December 15, when early repayment of obligations amounting to €7.93 billion due in 2026, 2027, and 2028 will take place, following the “green light” from the ESM. The prepayment will be made with €5 billion from the available cash reserves, while the remaining €3 billion will come from repos of the General Government entities.
It is noted that the loan from the first memorandum that Greece signed with eurozone countries in 2010 was €52.8 billion, with a repayment period from 2020 to 2040 (with an interest rate of 3-month Euribor + 0.5%). With the early buyback actions, this amount has been reduced to €32.3 billion. Additionally, from this year onwards, Greece is also repaying loans from the EFSF amounting to €141.8 billion, with repayment scheduled for 2056, while from 2034, €86 billion from the ESM will be added, with repayment set for 2060.
According to Ministry of Finance officials, the goal is to reduce public debt to 140% of GDP, with this reduction occurring at high levels annually, so that by the end of 2028, it will be at 130% of GDP. At the same time, another goal, based on the signal that will be sent to the markets, is for the country to achieve investment-grade status from Moody’s in 2025, the only rating agency that has not upgraded Greece’s credit rating. Additionally, the aim is for the Greek economy to rise to higher levels, approaching the A+ rating it held in 2010.
Currently, the country has high cash reserves, estimated at over 15% of GDP, while in a typical European country, this is less than 5%. Given these high cash reserves and the limited financing needs for 2025, the PDMA plans, according to information, to enter the markets and borrow up to €10 billion, while the government’s borrowing needs will not exceed €5 billion. The aim of this borrowing strategy, as explained by the Ministry of Finance officials, is to ensure the continuous presence of the government in international capital markets, further providing high liquidity issuances while maintaining, as much as possible, their already extended maturity profiles, reducing the government’s borrowing margins, and further ensuring the consistency of the Greek economy as a sovereign issuer with characteristics of a eurozone country.
