Home Correctional service Greece plans to prepay last IMF bailout loans – sources

Greece plans to prepay last IMF bailout loans – sources


ATHENS, Feb 3 (Reuters) – Greece plans to repay more than 7 billion euros in loans from the International Monetary Fund and eurozone partners over the next two months, repaying the rest of the IMF funds it borrowed to avoid bankruptcy during the financial crisis, two officials said.

The officials, who spoke on condition of anonymity, told Reuters on Thursday that the Treasury would repay 1.8 billion euros ($2.03 billion) in IMF loans ahead of schedule, the latest batch of a total of 28 billion euros that the lender provided in two bailouts between 2010 and 2014.

In addition, it would repay some 5.3 billion euros in loans from Greece’s eurozone partners expiring in 2022 and 2023 by the end of the first quarter.

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“We expect to complete the repayment within the next two months,” an official told Reuters.

“It will help us reduce our debt-to-GDP ratio. It will also send a signal to the markets that the Greek economy is strong and healthy,” added a second official.

Athens needed three international bailouts from the European Union and the IMF between 2010 and 2015, for a total of more than 260 billion euros. Since emerging from bailouts in 2018, it has relied solely on the markets for its financing needs.

Greece repaid around €6 billion to the IMF ahead of schedule in 2019 and 2021 and has €1.8 billion in outstanding loans due by 2024.

It started repaying the first bailout loans to its eurozone partners last year and wants to pick up the pace.

Disagreements and confrontations between the IMF delegation in Athens and successive Greek governments over the harsh austerity conditions imposed by the fund were common during the crisis years, when Greece was in deep recession with unemployment reaching 27%.

Greece expects to emerge from enhanced surveillance conditions that allow the European Commission to closely examine its compliance with commitments over the summer. The IMF could continue to provide advice and guidance.

The government estimates the economy grew by 9% in 2021 after the economy rebounded from the first wave of COVID lockdowns and expects growth of over 5% this year. It has a cash reserve of around 32 billion euros, enough to cover at least three years of maturing debt.

($1 = 0.8846 euros)

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Reporting by Lefteris Papadimas Editing by Tomasz Janowski

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