ECONOMY

Greece seeks ESM consent to repay part of IMF loans earlier

Greece seeks ESM consent to repay part of IMF loans earlier

Greece has filed a request to the European Stability Mechanism (ESM), the eurozone’s bailout fund, seeking its consent to pay back earlier expensive debt to the International Monetary Fund, government officials said on Wednesday.

The country has received three international bailouts from the eurozone and the IMF worth 280 billion euros since 2010.

It emerged from its latest bailout in August 2018 and has relied on the debt markets to cover its borrowing needs since.

Greece wants to repay debt worth about €3.3 billion to the IMF this year, out of a total of €5 billion in outstanding loans due by 2024.

The move allows Athens to reduce its debt-servicing costs, because IMF loans carry higher interest than Greece would now pay on the market.

“These are loans that expire in 2021 and 2022,” one of the officials told Reuters.

Under the bailout terms, repaying the IMF earlier would have triggered a proportional payment to the ESM, which is likely to waive this right, a second official told Reuters.

Athens made an early repayment of IMF loans in November 2019.

It has a cash buffer of about €32 billion, sufficient to cover maturing debt for at least two years.

[Reuters]