Greece’s European Union bailout lenders have approved a plan for the country to repay outstanding loans to the International Monetary Fund two years ahead of schedule.
The bloc’s bailout fund, the European Stability Mechanism, said Monday that the outstanding loans worth 1.86 billion euros ($2 billion) could be settled early, waiving its own requirement for early IMF repayments to be made in parallel with those made to European lenders.
“[This] sends a positive signal to markets about Greece’s financing position. It will also have a positive impact on Greece’s public debt profile and will generate some savings for the Greek budget,” ESM Managing Director Klaus Regling said in a statement.
Three successive bailouts totaling some 260 billion euros ($285 billion) between 2010 and 2018 helped Greece avoid bankruptcy and keep the shared euro currency despite tough budget austerity measures causing a surge in unemployment and poverty.
Despite exiting the bailouts four years ago, Greece remains under an enhanced surveillance program created by European lenders to monitor spending, an arrangement due to end later this year.
The ESM on Monday also approved the early Greek repayment of 2.65 billion euros ($2.91 billion) in loans that were made before the European bailout fund was formally established. [AP]