Green light for the early repayment of part of the loans from the first bailout program (GLF), amounting to €6.95 billion, was given today to Greece by the ESM. Specifically, the Boards of Directors of the European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) agreed today to waive the mandatory repayment obligation of ESM/EFSF loans to Greece, in relation to the early repayment to creditors of the Greek Loan Facility (GLF).
The ESM Board of Directors also approved the use of resources from a special cash buffer account, which was created at the end of the adjustment program, to partially finance this prepayment. Under the ESM and EFSF loan agreements with Greece, early repayment to certain creditors, including GLF lenders, triggers a proportional early repayment obligation to the ESM and EFSF.
“ESM and EFSF remain committed to supporting Greek authorities”
Thanks to the waivers granted today by the ESM and EFSF, Greece will no longer be required to proceed with a proportional early repayment.
“Greece continues to make steady progress in strengthening its economy. This additional early repayment to GLF creditors – the second largest to date – sends another positive message to financial markets, reduces interest rate risk for Greece and improves its debt structure. The ESM and EFSF remain committed to supporting the Greek authorities in their efforts to promote long-term growth and debt sustainability,” said Pierre Gramegna, Managing Director of the ESM and CEO of the EFSF.
The waivers and use of the cash buffer were granted following a formal request from the Greek government, which proposed the early repayment of loans under the GLF, originally maturing in 2029 and 2033-2035, totaling €6.94 billion. After this transaction, the funds held in the cash buffer account will be exhausted.
The Greek Loan Facility (GLF) was part of the first financial support program for Greece, which was agreed in May 2010. It consisted of bilateral loans from 14 eurozone countries, amounting to €52.9 billion, of which €26.3 billion remains outstanding.
Greece completed the repayment of its loans to the IMF two years ahead of schedule in 2022. The most recent early repayment of GLF loans was made in 2025.
