Bloomberg: Greece is preparing for an early repayment of 13 billion euros of debt - The debt-to-GDP ratio will fall below Italy's

Despite the debt reduction, fiscal discipline is maintained, while cash reserves will exceed 30 billion euros. The development marks the spectacular change in the country's image after the crisis.
The government's goal is to accelerate the reduction of public debt and, by the end of the year, for Greece to be below Italy in terms of debt-to-GDP ratio. The final decision on the exact amount and composition of the repayments has not yet been made.

The amounts under consideration for early repayment include approximately €2.5 billion in loans from the European Financial Stability Facility (EFSF), as well as a €2.2 billion bond maturing in 2027.

In parallel, Greece plans to reduce its stock of treasury bills by approximately €1.2 billion by the end of 2026.

New move after early repayment of €6.9 billion

The new move follows the strategy that Athens has been following in recent years, taking advantage of higher-than-expected primary surpluses and increased liquidity.

In June, Greece proceeded with early repayment of loans amounting to €6.9 billion, a move that further contributed to improving the country's image in the markets. Greek 10-year bond yields have now fallen below those of Italy, France and Britain.

The new repayment will reduce the country's future financing needs, while, according to the same information, the financing strategy for 2027 is expected to move at similar levels to that of 2026.

Greek debt at 137% of GDP
The Greek economy continues to perform better than several European partners, which is expected to lead to an overshoot of fiscal targets this year.

The primary surplus, i.e. the fiscal result before interest payments, is expected to exceed the target again. This gives the government more room both to accelerate debt reduction and to take support measures.

According to the Public Debt Management Agency, the debt-to-GDP ratio is expected to fall to 137% in 2026, compared to a previous forecast of 138.2%.

If the estimate is confirmed, Greece will leave Italy in first place in the ranking of the most indebted countries in Europe. The European Commission, however, until now placed this development in 2027.

Over €30 billion in cash reserves
The rapid de-escalation of debt does not mean that the government intends to abandon fiscal discipline. On the contrary, according to a source cited by Bloomberg, any new measures should remain within the European Commission's fiscal framework.

Prime Minister Kyriakos Mitsotakis is expected to present the government’s immediate priorities and the country’s roadmap to 2030 in early September, ahead of elections due by mid-2027.

If fiscal results continue to exceed targets, additional relief measures for the self-employed and other social groups could be announced, but no final decision has been made.

Meanwhile, Greece’s cash reserves are expected to exceed €30 billion by the end of 2026, providing a significant safety cushion.

This picture marks a spectacular change compared to the period of the debt crisis: Greece is not only reducing its debt more quickly, but is also using its fiscal space to limit its costs and future borrowing needs, aiming to to consolidate its position in the markets.