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Economy

Roaring Back, Greece Will Repay More Bailout Loans Ahead of Schedule

November 28, 2023

ATHENS – Outstripping even Germany – the European Union’s biggest economy – in an accelerating recovery, Greece will use growing revenues to make an early repayment of 5.3 billion ($5.8 billion) part of bailout loans.

That was reported in an exclusive by Reuters which said it will be done ahead of schedule, the monies owed to the Troika of the European Central Bank-European Stability Mechanism-EU, after the International Money Fund (IMF) was paid.

https://www.reuters.com/markets/europe/greece-repay-more-euro-zone-bailout-loans-ahead-schedule-officials-2023-11-28/

The EU institutions and IMF loaned Greece 326 billion euros ($356.96 billion) from 2010-18 to prop up an economy brought to near collapse by generations of wild overspending and runaway patronage.

Those came with harsh austerity measures that brought big pay cuts, tax hikes, slashed pensions and worker firings – exempting Parliament workers – and with shipping oligarchs and the rich prospering during the crisis.

Finance Ministry officials not named told the news agency that the New Democracy government, which is luring foreign investors and ended COVID-19 health measures to lure tourists, hopes for another early payment in 2024.

“On December. 15, we will repay earlier than expected 5.3 billion euros to Eurozone countries,” an official who spoke on condition of anonymity told Reuters, adding that the payment refers to loans maturing in 2024 and 2025.

Greece recently regained its investment grade credit rating after languishing for 13 years in the “junk” category and in 2022 paid the IMF 28 billion euros ($30.66 billion) loaned from 2010-14, doing it two years early.

Greece earlier also repaid another 2.7 billion euros ($2.96 billion) ahead of time as Prime Minister Kyriakos Mitsotakis is going all-out for a faster recovery with the pandemic waning and tourists coming in what looks to be record numbers.

“We might repay earlier more bilateral loans next year,” a second official told Reuters, without giving more details on the amount or the timing, the government not opting to further help households hard hit by rising prices.

Eurozone countries lent Greece 53 billion euros ($53.08 billion) in Greek Loan Facility (GLF) loans during its first bailout, with maturities extending to 2041 and the new early payment brings the total to 13 billion euros ($14.23 billion.)

Since the bailouts ended, Greece has had to rely on bond markets for its borrowing needs but was paying higher interest rates because of its debt and not until recently gaining investment grade status.

The government plans to borrow about 7 billion euros ($7.66 billion) in 2024 and has a rainy day fund of more than 35 billion euros ($38.32 billion) because of rising revenues, growth and primary surpluses.

After growth of 5. 9 percent in 2022, the economy is expected to expand another 2.4 percent in 2023 and 2.9 percent in 2024, more than twice the average of the Eurozone of 20 countries using the euro as currency.

Estimates are that the annual Gross Domestic Product (GDP) of 196.26 billion euros ($214.9 billion) in 2024 will show a 2.1 percent primary budget surplus not including debt, the cost of running cities and towns, some military expenditures and state enterprises.

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