Sustainable and with better prospects than other eurozone countries is Greek public debtwhose significant part will be repaid prematurely by 2031, a decade earlier in its normal expiry, as the Minister of Finance recently announced (Ministry), Kyriakos Pierrakakis.
The country’s public debt has better terms of service than the German and other member states, as it is served at a cost of 1.73%. Specifically, according to a note by the Ministry of Finance, early repayments to the loans of the first Memorandum will continue in the coming years so that the loan can be fully repaid by 2031, instead of the original plan for 2041.
It is noted that in December 2025 the Greek state will make further premature repayment of the Memorandum loan amounting to at least EUR 5.29 billion, with this amount concerning the expirations from 2033 to 2041.
With this move, the Greek State is passing by, the ministry says, a message of further safeguarding in institutions, evaluation agencies, but mainly to the international investment community that it is moving with foresight and insight, timely and in a safe time, to further reduce its already reduced annual gross financial needs.
Also, according to the decisions of the Eurogroup (May 2018), for the whole period between 2018 and 2032, if Greece achieves its budgetary goals and makes the structural changes agreed with the institutions, but in the meantime there is a global financial crisis or a state of violence, which is not the case with the Greek debt or a state of force. Country), then European institutions and eurozone countries will review additional measures for the viability of Greek debt.
As added to the informative note, in other words, our country has secured a quasi -guarantee to it, regarding the viability of its debt for the after 2032 era. Despite this assurance, although worldwide events have happened to date that could lead Greek debt to unsustainable trajectory (pandemic, energy crisis, geopolitical, duties, etc.) the Greek state and the government have faced these crises successfully without the need for 20 years.
The debt profile
All the hard effort of the last 15 years, reported by the ministry, has filed a general government debt portfolio that, with the end of 2024, has the following key features:
- Debt height: 364.8 billion euros
- Average debt duration: 18.8 years
- Middle Ramage Weight: 18.2 years
- Annual Cost of Service: 1.73%.
The aforementioned indicators show that Greek public debt, in Benchmark Portfolio, essentially resembles a counterpart, which should be repaid in one -off after about 19 years, which is not at any risk of market, expiry, 1.73%.
According to the ministry, if today, the most worthy eurozone country in Germany wanted to borrow 19 years (as the average weighing Greek debt), its borrowing costs would be 2.93%, ie 1.20% higher than the cost of service. At the same time, it would have to re-fund all its debt in less than half a year than Greece, since the average weighing natural natural duration of German public debt is about 8 years (compared to about 19 years of Greek) with a high risk for a future increased cost of new borrowing. The same risk is facing all European countries as a total of about 8.5 years have average natural debt.
It is also important that the country’s overall cash -free cash are in terms of general government at more than € 44 billion. The utilization of these moods has been and will remain optimal as, among other things, the policy of premature repayments of bilateral loans of the first memorandum that our country has drawn up with the eurozone countries (GLFA) will continue.
So far, the public has been discounted and fully repaid the IMF loans, while the GLFA bilateral loans of € 52.9 billion has already repaid € 21.3 billion. The remaining amount of these loans amounts to EUR 31.6 billion and is repaid in almost equal quarterly installments from 2029 to 2041, according to the original repayment plan.
Sustainable Greek debt is reflected in ratings and spreads. Any concerns about what is going on after 2032 are based on the recent, extremely painful experience of the 15 -year debt crisis that Greece experienced and at the consequence of it, with its three fiscal adjustment programs, the loss of at least 25% of its actual GDP and the country’s real -life. Stability, as well as the competitiveness of the Greek economy, etc.
The ministry also recalls the measures taken by the country in cooperation with its partners and their respective European institutions:
- The application of the PSI (Private Sector Involvement) in March 2012 and the voluntary exchange of bonds that followed reduced the nominal value of the country’s public debt by about 45% of GDP.
- The debt buy back, which took place in December 2012, further reduced the nominal value of public debt by about 10% of GDP.
- The implementation of short -term measures for the sustainability of Greek public debt that took place in 2017, reduced public debt by about 25% of GDP in terms of present value and finally,
- The implementation of the Middle Ages for the sustainability of Greek government debt that took place in 2018 also reduced public debt by about 25% of GDP in terms of present value.
All measures, in addition to reducing public debt, were primarily aimed at expanding the average natural physical duration of the debt portfolio as well as to stabilize the cost of service, at levels of historical low interest rates.
Today, it concludes the informative note, Greek public debt, despite its high percentage of GDP, is both viable and with much better prospects than many other eurozone countries.
The viability and positive prospects of Greek public debt are fully reflected by the continuous decline of Greek government securities over all other eurozone countries, which in some cases are significantly lower than countries with less debt and higher credit.
They are also reflected in the constant upgrades of the debtor of the Greek economy, in particular in the last two years of investment level and even higher.