German newspaper Handelsblatt believes that the expected repayment by Greece of high-interest loans issued by the International Monetary Fund will be an important political signal since it will reduce the country’s debt burden and strengthen Athens’ argument for easing the primary budget surplus target of 3.5 percent of gross domestic product agreed with its creditors.
Between 2020 and 2018, Greece’s creditors lent it 288.7 billion euros, including 32.1 billion from the IMF. Greece has repaid 23.8 billion to the IMF, and 8.3 billion remains, 3.7 billion of which Greece wants to repay early.
“Interest rates of up to 5.13 percent are due for these loan tranches. Even on the capital markets, Greece can now refinance [its debt] significantly cheaper,” says Handelsblatt.
However, it adds, “the Eurogroup, the [European Stability Mechanism] and the parliaments of some eurozone states, including the Bundestag, would have to agree.”
Therefore, the issue will occupy the next Eurogroup on September 13.
“The ESM has already signaled its agreement,” the article notes, adding that German objections earlier in the year were based on fears that then premier Alexis Tsipras wanted the IMF to stop monitoring Greece.