Greek Prime Minister Kyriakos Mitsotakis has highlighted the reduction of Greece’s public debt in a recent post, seeking first to draw a clear contrast with all previous governments and prime ministers under whose watch the debt continuously ballooned, and then to demonstrate the scale of the changes in public finances from 2019 to the present — as well as the opportunities that now open up following the announcement of an early repayment of €13 billion, scheduled to take place during 2026.
Read more: Mitsotakis: Reducing public debt is a national achievement and one of the most meaningful gains for the Greek people
Mitsotakis: “Reducing public debt is a national achievement”
Following this development, Greece will no longer hold the title of Europe’s most indebted nation. “This is a national achievement that transcends the daily grind of partisan bickering and negativity. It is the optimistic message now being sent by a dynamic economy, giving perspective and hope to society as a whole,” the Prime Minister stated, conveying the message that progress in the national economy translates directly into prosperity for citizens.
Mr. Mitsotakis stressed that reducing public debt is a “national duty,” underscoring that this milestone leaves behind Greece’s unwanted record as Europe’s most heavily indebted state. The Prime Minister spoke to the positive developments on the economic front, explaining the significance of the early repayment of €13 billion, which will accelerate the decline of the debt-to-GDP ratio.
“I know this news may not receive widespread coverage or be easily understood by everyone. Its substance, however, is invaluable. Because it means greater fiscal freedom for the state — and fewer burdens for citizens, especially our young people. That is precisely why reducing the debt was one of the central commitments I made, and I am glad that the persistent efforts of the government and all Greeks are making it a reality today,” he noted.
Below 110%
In his post, Kyriakos Mitsotakis added that “this development marks the fulfillment of a key objective — and ahead of schedule at that. By 2031, public debt will have fallen below 110% of GDP, having already shrunk by one-third since 2021.”
In the same spirit, the Prime Minister concluded that this represents one of the most meaningful achievements of the Greek people. “It is the optimistic message now being sent by a dynamic economy, giving perspective and hope to society as a whole. We said it. We are doing it. And we will keep going.”
According to senior officials at the Ministry of National Economy and Finance, for every €1 billion in early repayment, Greece saves €30 million in future borrowing costs. On the full €13 billion, total savings amount to €360 million — and over the seven-year horizon, savings from this tranche alone will exceed €2 billion.
“When you factor in the low spreads, plus the credibility premium that attracts major investors, the conclusion is clear: this approach delivers nothing but benefits,” the same sources stated, adding: “Through this move, the Greek state is sending a further reassurance signal to institutions, credit rating agencies, and above all to the international investment community — that it is acting with foresight and strategic vision, in a timely and secure manner, to further reduce its already-declining annual gross financing needs beyond 2032.”
More to come
“Early repayments will continue in the coming years, so that the loan in question is fully repaid by 2031 — a full decade ahead of the original 2041 schedule,” officials noted. This latest move follows the early repayment of €6.9 billion in loans last June.
Those funds originated from Greece’s first bailout programme, specifically from the bilateral loan facility extended to Greece in 2010. It is worth noting that German credit rating agency Scope Ratings, in a recent report, foresees a significant decline in Greece’s debt trajectory — projecting it will fall to 107% of GDP by 2031, down from 136% this year and 128% in 2027.
The result of this accelerated reduction is that by 2031, Greece will carry a lower debt burden than not only Italy — which it is expected to surpass already this year — but also France and Belgium, drawing close to the Eurozone’s average debt level. For the Eurozone as a whole, debt is expected to stabilize at around 90% of GDP in 2031, roughly the same as in 2027.
It is also noted that next month the Greek economy will be assessed by credit rating agencies DBRS, Moody’s, and Scope, with further reviews to follow in October from Standard & Poor’s and in November from Fitch.
Originally published in Apogeumatini
