Greece closes old bailout accounts: €5.3bn early debt repayment delivers €1.6bn in interest savings

In a move carrying both financial and symbolic weight, Greece is proceeding today with a new early repayment of €5.287 billion, further drawing a line under the country’s first bailout programme. The repayment αφορά European GLF bilateral loans with floating interest rates and maturities ranging from 2033 to 2041, following approval from the ESM and EFSF.

The operation strengthens the profile of Greek public debt, reducing exposure to future interest rate hikes and accelerating the pace at which debt is brought down in absolute terms and as a share of GDP.

Immediate budget relief

By retiring €5.287 billion ahead of schedule, the Greek state achieves interest savings of €1.6 billion, payments that—under the original timetable—would have weighed on the budget from 2026 onwards. This creates direct fiscal relief and additional room for policy priorities, while easing the long-term burden on taxpayers.

Crucially, the loans being repaid carried floating rates, meaning the move also shields public finances from renewed volatility in borrowing costs in the coming years.

The 2031 target

Greece’s strategic objective is the full repayment of bailout-era loans by 2031, roughly a decade ahead of their final maturity. Outstanding loans from the first bailout still total €31.6 billion, which would otherwise be repaid in quarterly instalments between 2029 and 2041.

Paying these obligations early sends a strong credibility signal to markets, reinforcing investor confidence and lowering future refinancing risks.

Debt on a downward path

According to official projections, general government debt is expected to stand at 145.9% of GDP by the end of 2025, fall to 138.2% in 2026, and drop below 120% of GDP by 2029, approaching levels seen in countries such as France.

This decline reflects not only economic growth, but also a deliberate policy of early repayments, which steadily reduces the debt stock.

Early repayments so far

Today’s payment builds on a series of similar actions:

• Between 2022 and 2024, Greece repaid €15.9 billion in European loans ahead of schedule
• With the new repayment, this figure rises to €20.1 billion
• In parallel, €7.9 billion was used to fully repay loans to the IMF

In total, Greece has prepaid €29 billion in debt, generating interest savings of €3.5 billion to date.

Market funding in 2026

For 2026, the state budget projects net borrowing of €13 billion, up from around €8 billion in 2025, reflecting higher gross financing needs estimated at €30.1 billion.

Roughly €8 billion of these needs are expected to be covered through bond issuance, maintaining Greece’s steady presence in international capital markets. In 2025, the state raised approximately €7.5 billion from the markets, underscoring continued investor access and confidence.

The broader message

Beyond the numbers, the latest early repayment sends a clear message of normalisation: Greece is no longer firefighting a debt crisis, but actively optimising its debt profile. The remaining challenge is to ensure that fiscal discipline goes hand in hand with sustainable growth and social cohesion, so that closing the bailout chapter translates into tangible benefits for the wider economy and society.

Source: pagenews.gr