Eurozone approval for third early repayment by Greece of IMF loan

Greece has received the “green light” from its Eurozone partners-cum creditors to repay a loan extended by the IMF before its maturity, Greek FinMin Christos Staikouras announced on Friday afternoon.

The development, which was previously announced, will mark the third time since 2019 that Greece has pre-paid IMF loans, and covers 8.2 billion euros in loans that the Washington D.C.-based fund extended to the country during the first two bailouts. The latest loan package that will be repaid was due to mature in two years, in 2024.

One of the priorities of the current center-right Mitsotakis government since it was elected in July 2019 was to repay institutional creditors’ loans before maturity. The reasoning was to take advantage of historically low interest rates attached to sovereign borrowing – especially by Euro-area states – thereby, saving money for state coffers in the long-term. Additionally, the early repayments were a message to the markets that the country’s economy was fully normalized after three successive bailouts since 2010, and that the Greek state’s finances and fiscal policy were creditworthy.

“Amid heightened uncertainty and insecurity, Greece has made a significant step towards strengthening (its economy) and self-confidence. Euro-zone finance ministers approved the early repayment of the balance of loans received by our country from the IMF, as well as a portion of bilateral loans Greece received from other European Union member-states,” Finance Minister Christos Staikouras said.