Greek Debt: Greece will repay earlier its loans of 2.7 billion euros to eurozone

Greece will for the first time repay earlier its loans of 2.7 billion euros owed to eurozone countries, under the first memorandum, finance ministry officials told Reuters, on Thursday.

The country, the most indebted in the eurozone, exited its third and final memorandum in 2018 and has since been financing itself from markets to meet its borrowing needs. This will be the first time it will repay debt to the eurozone earlier than planned. It is also a move aimed at improving debt sustainability.

“We plan to repay earlier the amount of 2.7 billion euros of GLF loans maturing in 2023,” one of the officials told Reuters, adding that the payment will be made by the end of the year.

“This will normalise our debt maturity profile and reduce next year’s borrowing needs in a rising interest rate environment,” the official added.

Greece received 53 billion euros in intergovernmental loans from eurozone countries (GLF) under the first memorandum with repayments extending until 2041. With this move, Greece will have repaid a total of 8 billion euros by the end of the year.

Earlier this year, the finance ministry moved to repay the last loans to the IMF, two years ahead of schedule. It started paying off the GLF in 2020. The country has a cash reserve of 39 billion euros and could cover its borrowing needs for at least two years without resorting to borrowing from the markets.