The European Stability Mechanism (ESM) today approved the early repayment of €5.29 billion in bilateral loans from the Greek Loan Facility (GLF). This means Greece will pay off another early loan tranche on 15 December from its first bailout program.

The ESM and the European Financial Stability Facility (EFSF) boards agreed to waive the requirement for proportional repayment of ESM/EFSF loans in connection with Greece’s early repayment to other official creditors. The ESM board also approved the use of funds from a special liquidity account created at the end of the adjustment program to finance this early repayment.

“Greece continues to make remarkable progress in strengthening its economy. This additional early repayment of GLF loans sends another positive signal to financial markets, improves Greece’s debt structure, and reflects the country’s stronger fiscal position. The ESM and EFSF remain committed to supporting the Greek authorities in their efforts to foster long-term growth and ensure debt sustainability,” said Pierre Gramegna, the ESM’s Managing Director.

Under Greece’s loan agreements with the ESM and EFSF, any early repayment to certain official creditors, including the GLF lenders, triggers an obligation for proportional early repayment to the ESM and EFSF. Thanks to today’s exemptions, Greece will not be required to make any such proportional repayments to either institution.

Greece’s request

The exemptions and the use of the liquidity buffer were granted following Greece’s formal request to repay early GLF loans maturing between 2033 and 2041, totaling €5.29 billion, using funds from its cash reserves (the so-called “cushion”).

The GLF formed part of the first financial assistance program for Greece, agreed in May 2010. The facility consisted of bilateral loans from 14 eurozone countries amounting to €52.9 billion, of which €31.6 billion remain outstanding.

Greece repaid its IMF loans two years ahead of schedule, in 2022. The previous early repayment of GLF loans took place in 2024.