Early payment of Greek debt
State will return 7 bln euros to the IMF and other eurozone members earlier, saving €70-80 mln
Greece stands to benefit some 70-80 million euros thanks to the early repayment of its outstanding dues to the International Monetary Fund, as well as the part-repayment of bilateral loans from eurozone countries that will take place in January and March respectively.
The significance of that move, according to officials at the Public Debt Management Agency (PDMA), is based on the fact that the country will be relieved of a debt of €7 billion (€1.7 billion to the IMF and €5.3 billion to fellow eurozone states) that it would have to repay over the next couple of years by resorting to the money markets in a period of high uncertainty. For that purpose the government will utilize part of its cash buffer, which is currently at a high level.
Nevertheless, paying off the IMF also bears a symbolic significance, as it will signify the end of an important as well as painful chapter of the bailout period.
The head of the fund, Kristalina Georgieva, said on Monday she was “excited that the country is doing so well. This is a remarkable achievement for the country. The repayment of the Fund is bringing to a symbolic end a difficult period for the Greek people and the economy of Greece. Our role will continue to include surveillance and the supply of policy advice, we will continue to supply a service to Greece if the country deems it useful.”
The remainder of the IMF would normally have to be paid off between 2022 and 2024, and its early repayment is expected to save the country some €35-40 million, PDMA sources say.
In mid-March Greece is expected to pay off part of the so-called Greek Loan Facility loans that it took out in May 2010, amounting to €80 billion. About €5.5 billion of that is due in 2022 and 2023, forming part of the approximately €53 billion that is still due, up to 2041.
For the repayment of both sets of dues, Greece requires the approval of the European Stability Mechanism, which has already implied its nod. It had also approved a previous such payment to the IMF.