The Greek Finance Ministry has hit back at opposition criticism of its early public debt repayment policy, arguing that reducing the country’s financial obligations generates significant benefits for citizens and future generations. The ministry noted that the criticism comes from political forces that previously governed the country, contributed to the build-up of public debt and, as it pointedly remarked, “played a role in driving Greece into the bailout era.” It further argued that current policy is moving in the opposite direction — paying down debt faster, cutting interest expenditure, and expanding fiscal space.
According to figures cited by the ministry, the total amount of early public debt repayments for 2026 is expected to reach approximately €12.84 billion. This includes the repayment of bilateral GLF loans worth around €6.94 billion, completed in June; a €1.2 billion reduction in Greek Treasury bills; the upcoming early repayment of €2.5 billion in EFSF loans; and the early settlement of a Greek government bond worth approximately €2.2 billion, originally due to mature in December 2027.
Finance ministry: the benefit from interest savings
The ministry stressed that debt repayment is a financial transaction, not a fiscal one. Under Eurostat rules, it explained, such repayments are not counted toward the primary surplus, the overall deficit, or expenditure targets.
This forms the ministry’s core rebuttal to criticism that the funds could have been redirected to other public spending. Such a comparison, it wrote, is “entirely unfounded,” since public expenditure constitutes fiscal transactions that affect the deficit, spending targets, and ultimately increase public debt.
The average weighted maturity of the debt in question stands at 7.1 years, while the average weighted cost of servicing it is approximately 2.9%.
On this basis, the annual benefit to the Greek state from reduced interest payments is estimated at around €370 million. At the same time, surplus cash reserves are being put to work — reserves whose yields, according to the ministry, fall significantly short of the average cost of public debt servicing.
Over a seven-year horizon, the total benefit is estimated at a minimum of €2.6 billion.
The economic team links debt reduction not only to lower future obligations, but also to the creation of greater fiscal headroom for improving living standards.
The ministry also argued that its portfolio management moves significantly reduce refinancing risk, maintain a high average weighted maturity for the debt, and make productive use of the state’s cash reserves.
The strategic goal, according to the announcement, is for Greece to no longer be Europe’s most indebted country by the end of 2026. By the late 2020s, the target is for Greece to rank fourth among the eurozone’s highest-debt nations, while by the mid-2030s, the public debt-to-GDP ratio is set to fall below 100%.
Lower borrowing costs
The ministry also highlighted that this policy has already contributed to an improvement in Greece’s creditworthiness, citing recent upgrades by international credit rating agencies.
It further emphasised that Greece’s sovereign borrowing costs are now consistently lower than those of other eurozone member states — specifically, 13 basis points below Italy and 17 basis points below France.
According to the ministry, the benefits of lower borrowing costs extend beyond the public sector, filtering through to Greek businesses, which can now access financing at lower rates than their competitors — with positive knock-on effects for broader economic growth.
