Greece is focused on reducing its massive public debt. Credit: Greek Reporter
Greece on Monday made an early repayment of €5.29 billion ($6.16 billion) in loans under its first bailout program, the Greek Loan Facility (GLF), after the Boards of Directors of the European Stability Mechanism (ESM) and the European Financial Stability Fund (EFSF) approved the move earlier in December.
PM Kyriakos Mitsotakis pledged early repayment in 2023 in an effort to chip away at Greece’s public debt, which is estimated to be around €403.2 billion (as of June 2025) or approximately $433.9 billion.
Chipping away at Greece’s massive debt
This debt is 145.9% of GDP for 2025. This ratio is projected to continue decreasing. In the 2026 budget presented recently, the Greek government expects public debt, the highest in the Eurozone, to drop by 7.7 percentage points to 138.2% of GDP in 2026 and to below 120% in 2029. “Our target is to stop being the most indebted country in Europe in the next years,” Finance Minister Kyriakos Pierrakakis said at a press conference presenting next year’s budget plan.
Pierre Gramenia, ESM Managing Director and EFSF CEO, said:
“Greece continues to make significant progress in strengthening its economy. This additional early repayment of the GLF loan sends another positive signal to financial markets, improves Greece’s debt structure and reflects the country’s improving fiscal position. The ESM and EFSF remain committed to supporting the Greek authorities in their efforts to promote long-term growth and ensure debt sustainability.”
The repayment will draw on funds from a special cash reserve account created at the end of Greece’s adjustment program. The GLF, part of Greece’s first financial support program, agreed to in May 2010, included bilateral loans from fourteen Eurozone countries totaling €52.9 billion ($61.6 billion) euros, of which €31.6 billion ($36.8 billion) euros remains outstanding. Greece completed repayment of its loans to the International Monetary Fund two years ahead of schedule in 2022.
Opposition questions early debt repayment amid cost-of-living pressure
Opposition parties criticized the government’s decision of early repayment, arguing that the move prioritizes fiscal optics over the needs of the real economy.
They contend that directing such funds toward domestic investment, public services, wage support, and targeted relief for households would deliver stronger economic and social returns, particularly as cost-of-living pressures persist.
Opposition figures have repeatedly argued that using available liquidity for accelerated debt repayment drains resources from incomes and growth. They have also questioned whether the timing is appropriate given the continuing social and cost-of-living strain facing households.
The government, however, maintains that the early repayment will reduce future interest costs and improve debt sustainability.