Benefits of Early Repayment of Public Debt Explained by Thanos Petralias

The benefits of early repayment of Greece’s first memorandum loans were outlined by Deputy Minister of Finance, Thanos Petralias, in response to a query from SYRIZA MP Nikos Pappas. According to the Ministry of Finance, Greece has already repaid €21.3 billion of its initial €52.9 billion in bilateral loans from European Union countries under the Greek Loan Facility (GLF) and has fully settled its debts to the IMF. The remaining €31.6 billion will be repaid ahead of schedule by 2031—ten years earlier than the original maturity date of 2041. In December 2025, Greece plans to make an early repayment of €5.29 billion, covering maturities from 2033 to 2041. This action is expected to reduce Greece’s debt-to-GDP ratio by approximately 2.2% and save around €150 million annually over the next 12 years through lower interest payments. Additionally, early repayments decrease refinancing risks and improve Greece’s credit rating, reinforcing confidence among international institutions, rating agencies, and investors. By preemptively addressing potential future cost increases after 2032, Greece demonstrates prudent fiscal management, ensuring reduced long-term financing needs. The GLF loans carry higher interest rates compared to other official sector loans, with Euribor + 0.5% exceeding 3% in 2024. Early repayment alleviates annual interest burdens equal to the Euribor + 0.5% rate. Moreover, according to Eurostat rules, debt repayment is a financial—not fiscal—transaction, meaning it does not affect primary surplus or total deficit metrics. The sustainability of Greece’s public debt is reflected in declining spreads on government bonds versus Eurozone peers and consistent upgrades in credit ratings, achieving investment grade status in recent years. These actions ensure reduced future burdens, fostering economic growth and improving citizens’ well-being.