Greece on Monday officially requested to repay part of its IMF loans before the maturity date, the prime minister said, in a bid to save interest rate costs.
“Greece today submitted a request for the early repayment of the costly part of its IMF loan,” Kyriakos Mitsotakis said in a tweet.
“This move bolsters the country’s credibility, improves the viability of the public debt and saves the Greek state funds,” the PM said.
According to Bloomberg, the government hopes to pay off 2.9 billion euros ($3.2 billion) of the remaining 8.8 billion Greece owes the Washington-based IMF.
Finance Minister Christos Staikouras said early repayment would immediately save Greece around 70 million euros.
Staikouras said the IMF debt Greece is seeking to repay carries an interest rate of 4.91 percent, when Greek 10-year bonds are currently trading at under 2.0 percent.
Staikouras had earlier informed the EU of Greece’s intentions on Friday, at his first meeting with his eurozone counterparts since taking office in July.
“I welcome such an early repayment for a very simple reason: because it increases the debt sustainability of Greece,” Klaus Regling, the head of the European Stability Mechanism, the eurozone’s bailout fund, said Friday.
Regling said once officially launched, the approval process would take about two months.
Regling’s ESM, which is governed by the eurozone 19 finance ministers, holds most of the public debt owed by Greece after a decade of EU and IMF bailouts.
Greece’s overspending triggered a major eurozone crisis a decade ago, and nearly led to the demise of the single currency bloc.
Since then, Athens has carried out painful reforms in exchange for three bailouts worth 289 billion euros ($330 billion) from the European Union, the European Central Bank and the International Monetary Fund.
The country exited its third and final international bailout in August 2018.
Nevertheless, its debt load remains high, with public debt standing at 335 billion euros ($372 billion) or 180 percent of GDP last year.
Source: AFP
