EFSF board decides to reduces step-up margin on Greek loans to zero

European Financial Stability Facility’s (EFSF) board of directors on Tuesday announced a decision to reduce, to zero, the step-up margin accrued by Greece for the period between June 17, 2021 and Jan. 1, 2022, as part of medium-term debt relief measures agreed with the country in 2018. The value of the sixth successive reduction amounts to 122.5 million euros.

Additionally, as part of the debt relief measures, acting as an agent for the euro area member states and after their approval, the European Stability Mechanism (ESM) transferred 644.42 million euros to Greece last December . This corresponds to income earned on holdings regarding the Securities Markets Programme (SMP) and the Agreement on Net Financial Assets (ANFA).

“Greece continued its progress with reform implementation, in the challenging circumstances of the Covid-19 pandemic,” according to ESM Managing Director and EFSF CEO Klaus Regling.

“The government carried out reforms in the area of public financial management, adopted anti-trust remedies in the energy sector, and simplified investment licensing. In addition, it achieved good progress in privatization and governance of state-owned enterprises, social welfare and public administration. The European institutions considered that Greece made sufficient progress towards reform commitments in the first half of 2021. This has cleared the way for the next tranche of debt relief measures tied to those commitments.”

He added, “Greece has rebounded swiftly from the pandemic crisis in 2021, recovering all the output losses from the year before. The outlook for this year and beyond is encouraging, thanks to a positive growth momentum and the impetus from the Recovery and Resilience Facility. That said, public debt remains very high, underscoring the importance of returning to a strong budgetary position like in the period before the pandemic. Reform efforts should continue to improve the resilience of the financial sector and to clear government arrears.”