ATHENS – While it will take decades for Greece to pay what’s left of 326 billion euros ($370.74 billion) in three international bailouts, one of them – to the International Monetary Fund (IMF) will be settled by the end of March.
That’s two years early, Finance Minister Christos Staikouras in an exclusive report, despite the country still dealing with the COVID-19 pandemic and handing out subsidies to workers and businesses affected by lockdowns.
The bailouts began one-by-one in 2010 after Greece was pushed to the edge by generations of wild overspending and runaway patronage by successive governments, and brought worries of being pushed out of the Eurozone.
The loans ended in August, 2018 but during the long-running crisis – during which harsh austerity measures were imposed on orders of the lenders – Greece had to rely on high-interest monies from the bond markets.
It had made early payments to the Washington, D.C.-based IMF earlier and owes 1.9 billion euros ($2.16 billion) in loans due by 2024, the last of 28 billion euros ($31.84 billion) loaned from 2010-14.
“Greece has officially submitted a request for the full repayment of the outstanding balance of its IMF loans. The relevant procedure has been launched and is expected to be completed at the end of March,” Staikouras said in an interview.
The bailouts failed to slow the spiraling debt which has kept rising and is at 190 percent of the Gross Domestic Product (GDP) of 176.13 billion euros ($200.3 billion) annually.
While still owing the Troika of the European Union-European Central Bank-European Stability Commission,) the early repayment of the IMF loans will save about 50 million euros ($56.86 million) annually.
Staikouras said that despite increasing spending to deal with the impact of the COVID-19 pandemic, Greece implemented “a prudent and responsible fiscal policy and an insightful debt issuing strategy,” the report added.
He said stronger growth and higher budget revenues will allow the country to return next year to a surplus in the primary budget, which excludes debt servicing costs as well as those for social security, state enterprises and some military expenditures.
“Regarding 2023 onwards, we will shift towards the achievement of realistic primary surpluses,” he said, which would be a boost toward trying to return to investment grade status and lower loans costs.
Greek bond yields are now at their highest levels since April 2020, with 10-year bonds now yielding around 2.5 percent compared with 0.9 percent in September 2021 and with plans to borrow 12 billion euros ($13.65 billion) from the markets in 2022.
With Prime Minister Kyriakos Mitsotakis turning his attention toward speeding a delayed economic recovery, the New Democracy government expects ambitious growth of 5 percent to be surpassed this year and a primary deficit shrinking to 1.2 percent from 7.3 percent in 2021.
Troika monitors are still checking economic progress with requirements that financial targets be hit to avoid triggering more measures, including meeting a primary surplus of 2 percent starting in 2023.
Staikouras said Greece has already started preparing to exit its surveillance program this summer. “We have already raised the issue of the exit from it with the European Institutions,” he also said.