The German newspaper Handelsblatt has lauded Greece for its notable progress in reducing public debt, particularly in light of the government’s announcement to make an early payment of €8 billion to creditors this December.
This repayment, revealed by Economy and Finance Minister Kostis Hatzidakis, pertains to loans received at the onset of Greece’s debt crisis in May 2010. While these repayments were originally scheduled for between 2026 and 2028, the government is opting for early repayment as part of its broader strategy to further reduce the nation’s public debt.
In its report, Handelsblatt emphasises the significant strides Greece has made in recent years. From 2020 to 2023, the country successfully reduced its debt ratio by an impressive 45.1 percentage points. According to data from Eurostat, Greece’s public debt as a percentage of GDP dropped from a staggering 209% in 2020 to 163.9% by the end of 2023. This reduction marks a crucial turning point for Greece, which had previously been considered a candidate for bankruptcy.
The positive trajectory of Greece’s debt management is underscored by recent forecasts from the International Monetary Fund (IMF). In its latest edition of the Fiscal Monitor, the IMF projects a continued downward trend for Greece’s public debt, estimating it will fall by 29.5 percentage points to 139.4% of GDP by 2029. Analysts from credit rating agency Scope have an even more optimistic outlook, predicting that the debt ratio could decrease to 132.8% within the same timeframe. If these predictions come to fruition, Greece is expected to pass the title of the country with the highest public debt ratio in the European Union to Italy by 2028.
Minister Hatzidakis’s decision to expedite debt repayments is part of a broader fiscal strategy aimed at stabilising the economy and restoring investor confidence. The government believes that these actions will not only improve Greece’s financial standing but also enhance its overall economic resilience. As Greece continues to recover from the financial turmoil of the past decade, this progress in debt reduction is seen as a significant step toward sustainable economic growth and fiscal responsibility.