Greece’s decision to proceed with early debt repayment of €5.3 billion raises legitimate questions among the public, as reported by Giorgos Avtias in “Apogeumatini.” Instead of allocating these resources directly to society, the government chooses to reduce public debt by paying off loans from the first bailout package of 2010, with repayment scheduled for December.
Read: Recovery Fund: Race against time for bank loans – The difficult target for January 2026
Current state of Greek debt
Greece’s public debt in the first quarter of 2025 reached 152.5% of GDP, marking a significant decrease of 9.3 percentage points compared to the same period in 2024. Despite being the lowest level since 2012, Greece still remains significantly distant from the European average of 58.4% of GDP.
The national target anticipates further debt reduction to 130% of GDP by 2028, while economic analysts estimate that in 2025 the ratio will fall below 150%.
Reasons behind the strategic debt decision
The early debt repayment occurs at a critical time, as the Greek economy is on a recovery trajectory following the decade-long crisis. This move reflects the country’s systematic exit from the period of economic suffocation, when it had borrowed €280 billion under strict austerity measures.
Accelerating debt reduction will allow the transfer of part of the saved resources to the state’s cash reserves. Greece’s cash reserves started 2025 at €33 billion and now approach €45 billion.
Critical benefits of early repayment
The ten-year early repayment of first memorandum loans brings significant advantages:
• Frees the country from significant debt burden for the next decade
• Avoids transferring additional financial obligations to future generations
• Reduces the overall borrowing cost of the Greek state
• Contributes to upgrading the country to a higher investment category
• Allows Greece to borrow at lower interest rates than France, Germany and Italy
• Strengthens state cash reserves
Prospects and future targets
Greece’s public debt has declined by 50 units since 2020, reaching 153.6% of GDP today, with a continuing downward trend in 2025. European partners confirm that Greek debt shows no upward trends, a fact that enhances the country’s credibility in international markets.
