ECONOMY

ESM: Repayment of expensive IMF loan by Greece to help debt sustainability

esm-repayment-of-expensive-imf-loan-by-greece-to-help-debt-sustainability

The benefits of Greece's early repayment of a chunk of its loan from the International Monetary Fund (IMF) lie mainly in improving debt sustainability in the long run, the European Stability Mechanism (ESM) said in its recommendation to the Parliaments of eurozone member-states.

The ESM says the immediate savings for Greece are estimated at 33.08 million euros by January 2021, according to the recommendation published in Greek news website Capital.gr on Thursday. It said the repayment will be met positively by the markets.

The boards of the ESM and the European Financial Stability Facility (EFSF) are expected to discuss the issue on the sidelines of the Euroworking Group meeting next Monday (Oct. 28).

The organization has already made a positive recommendation to the European institutions and member-states. The positive view is also reflected by previous statements of its Managing Director, Klaus Regling.

The ESM is quick to point out to member-states that the move does not mean that the IMF will no longer be involved in Greece, noting it will remain active until June 2024.

The repayment request had been tabled by Greek Finance Minister Christos Staikouras in September.