In a significant development, Greece has announced its plans to fully repay the remaining loans from the first bailout package by 2031, ten years earlier than initially scheduled. This decision, revealed in exclusive reports by Reuters, comes from two government officials and marks a major milestone in the country’s recovery from a prolonged debt crisis.
The repayment strategy will involve gradual payments, with annual installments of €5 billion. This initiative underscores the Greek government’s commitment to shedding its title as the most indebted nation in the European Union, a label it has carried for years.
A Step Toward Financial Stability
“This goal of early repayment signifies our dedication to financial stability and economic growth,” stated one anonymous official. The funding plan is expected to leverage an existing reserve of €37 billion, surplus revenues, and new bond issuances.
Finance Minister Kyriakos Pierrakakis confirmed this intention during an interview, expressing confidence in the strategy’s potential to enable Greece to eliminate its status as the most indebted EU member in the coming years. “It is a realistic and attainable goal,” he emphasized.
The Greek economy is slowly recovering from the extensive crisis between 2009 and 2018, a period that nearly led to the country’s exit from the eurozone and forced citizens into a prolonged austerity era.
Debt Outlook
According to forecasts, Greece’s public debt, which remains the highest in the eurozone, is anticipated to fall below 140% of GDP by 2027. Officials project that the debt will reach around 135% of GDP by then, which is lower than Italy’s estimated 138% in 2026.
The improvements in Greece’s economic situation are becoming increasingly apparent. After regaining investment-grade status in 2023, the cost of borrowing for the country has significantly decreased, dropping below that of Italy.
From Crisis to Recovery
The Greek debt crisis began in 2009 when the country revealed a significant public finance deficit, stemming from decades of tax evasion and excessive government spending. Between 2010 and 2015, Greece received three bailout packages totaling €280 billion from the eurozone and the International Monetary Fund (IMF).
The IMF was fully repaid in 2022, with a commitment to pay back €22 billion of the €53 billion from the first bailout package by the end of 2024. The remaining balance is expected to be cleared by 2031.
Despite ongoing pressures from inflation, Greece’s economy is projected to grow by 2.3% this year—more than double the eurozone average—indicating a robust recovery amid global challenges.
As Greece charts its path away from international financial aid, this early repayment strategy marks a crucial step toward a more sustainable economic future, aiming to establish the nation as a resilient player within the European Union.
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