Finance Minister Staikouras: Greece will repay final IMF loans by March, surplus by 2023

IMF Greece flag Staikouras

Greece will repay the final tranches of bailout loans owed to the International Monetary Fund by the end of March a whole two years ahead of scheduled, said Greek Finance Minister Christos Staikourais to Reuters on Monday.

The country, which received more than 260 billion euros in bailout loans from the European Union and the IMF during its decade-long financial crisis, has relied solely on bond markets for its financing needs since exiting its third bailout in 2018.

Since then, it has also made several early repayments to the IMF and now owes 1.9 billion euros in loans by 2024, the last batch of a total of 28 billion euros that the Washington-based Fund provided between 2010 and 2014.

Staikouras said in an interview with Reuters that Greece has officially submitted a request for the full repayment of the outstanding balance of its IMF loans.

He said that expected the procedure to be completed by the end of March

Greece remains the Eurozone’s most indebted nation, with public debt at 189.6% of gross domestic product in 2022.

The move is expected to reduce debt by about one percentage point and save Greece about 50 million euros in interest repayments.

Staikouras said that despite increasing spending to deal with the impact of the COVID-19 pandemic, Greece will return to a primary surplus from 2023 onwards, as promised to its lenders, thanks to stronger growth and higher budget revenues.

This would be a significant step as Greece seeks to return to investment grade status by 2023.

The European Central Bank’s hawkish turn has sent Greek bond yields to their highest levels since April 2020, with 10-year bonds now yielding around 2.5% compared with 0.9% in September 2021.

The Finance Minister explained that Greece implemented a prudent and responsible fiscal policy and an insightful debt issuing strategy.

Staikouras stressed that despite the consecutive credit rating upgrades during the last two years, the country has not yet achieved investment grade status.

He added that from 2023 onwards, Greece will shift towards realistic primary surpluses.

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