Greece is saving roughly €800 million a year through its program of early debt repayments, Finance Minister Kyriakos Pierrakakis claimed Monday, laying out the financial logic behind one of the government’s flagship fiscal policies.
Speaking before the parliamentary Committee on Public Enterprises, Banks, Utilities and Social Security Funds, Pierrakakis argued that for every €1 billion repaid ahead of schedule, Greece saves €30 million annually in interest costs. With €26.5 billion repaid to date, those savings now total approximately €800 million, he said.
The minister was addressing the committee during the confirmation hearing for the reappointment of Bank of Greece Governor Yannis Stournaras, using the occasion to defend the government’s approach to reducing the country’s debt burden. Greece emerged from its third international bailout in 2018, having accumulated one of the largest public debt loads in the eurozone during a decade-long financial crisis.
A particular focus of the early repayments has been the Greek Loan Facility, a bilateral lending arrangement under which eurozone member states provided emergency financing to Greece during the crisis years. Pierrakakis said the risk associated with a large cluster of debt obligations coming due around 2032 had been “substantially reduced” and was “no longer a topic of discussion,” crediting interventions by the Public Debt Management Agency. Roughly €25 to €30 billion in projected future costs had been smoothed out through those interventions, he said.
“One generation inherited this burden from those that came before it,” Pierrakakis said. “This generation will not pass it on.”
The minister described the repayment strategy as a “mature, forward-looking and consistent policy” with intergenerational implications, and connected it to Greece’s improved standing with international credit rating agencies. Greece regained investment-grade status from major rating agencies in 2023, ending years of junk-bond classification that had locked it out of mainstream capital markets.
On the banking sector, Pierrakakis rejected suggestions that Greek banks should face additional taxation, arguing that such a move would restrict credit to the broader economy and send a negative signal to markets. He attributed the improved profitability of Greek lenders in part to lower provisioning requirements, reflecting what he described as a reduction in non-performing loans and an overall improvement in portfolio quality, citing Bank of Greece data.
The minister also cited the abolition of certain banking fees in the summer of 2025 as evidence that the government was prepared to intervene on behalf of consumers. “We want the system to work,” he said. “If we feel that we need to intervene, we intervene.” He added, however, that the government had no intention of using banks as a political tool.
Pierrakakis closed his remarks with a reference to private debt management and the out-of-court settlement mechanism the government has been operating to help households and businesses restructure obligations. He also directed pointed criticism at the socialist PASOK party, which cast a “present” vote, effectively abstaining, on the question of renewing Stournaras’s mandate at the central bank.
Source:ot.gr
