The “green light” for the early repayment of part of Greece’s transnational loans (GLF) amounting to 8 billion euro was given by the ESM.
On December 13, the planned – from the beginning of 2024 – repayment of transnational loans (Greek Loan Facility) in the amount of 7.93 billion is expected to take place. euros, which will be a relief for the Greek public debt.
The approval of the ESM concerns the possibility of our country being able to use the “cushion” of 15.7 billion for debt repayment. euro which had been allocated to Greece since 2018. How much of this came from the balance of the 86 billion loan. euros, which the country had not disbursed in the third memorandum. It is recalled that Greece had disbursed 61.9 billion from the EFSF loan. euro. From the balance of 24.1 billion euros it was agreed that Greece would get an additional 15.7 billion euros which would be used to meet its needs in the event that it could not raise funds from the markets.
Because the early repayment process will continue in the coming years, Athens has received pre-approval for the disbursement of another two double installments both next year and in 2026, as first revealed by OT.
Gramerga (ESM): Another positive step
“Greece continues to take important steps in its economic development. It is one of the fastest growing economies in the EU and has returned to investment grade. The planned early repayment of GLF loans is another positive signal for financial markets and demonstrates the improvement of Greece’s fiscal position. The repayment will generate some savings for the Greek budget and also strengthen its liquidity management. These are remarkable developments for the ESM and 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 strengthen long-term growth and debt sustainability,” said ESM CEO and EFSF CEO Pierre Gramegna.
How the relief will be done
With regard to the current early repayment, it concerns a triple tranche of 8 billion. euros (7.93 billion euros) from the loan that Greece took at the start of the first Memorandum directly from the countries of the Eurozone. The assessment of ODDIX is that on December 13, there will be all the formal approvals for the early repayment of this tranche, as well as the simultaneous use of the “cushion” of 15.7 billion. euro from the ESM. The government aims to save around 300 million. euros per year from interest until 2028, with a simultaneous improvement in the profile of the Greek public debt.
For the repayment of the 8 billion euros, an amount of 5 billion EUR 100 million of these funds will be used in December for the new early repayment of bilateral loans of the first memorandum, together with an additional EUR 3 billion. euros from the cash reserves of the Greek government. These are loans given to our country within the framework of the first program, which was agreed in May 2010 and included bilateral loans from the countries of the eurozone (€52.9 billion).
It is worth noting that once the repayment of the 8 billion euros, will be the 4th early repayment of bilateral loans. And this is because they have been preceded in March 2019 (2.7 billion euros to the IMF), in March 2021 the early repayment of 2.65 billion. euro (for 2023 together with the full early repayment of IMF loans amounting to EUR 1.86 billion), followed by another early repayment of GLF loans amounting to 5.29 billion. euro in December 2023.
Source OT
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