Green light from the ESM for Greece to early repay 6.95 bln euros of first bailout loans

The European Stability Mechanism (ESM) on Friday gave Greece the green light to proceed with the early repayment of part of the loans from the first bailout program (GLF), amounting to 6.95 billion euros.

The Boards of Directors of the European Stability Mechanism and the European Financial Stability Facility agreed on Friday to waive Greece’s obligation to make proportional early repayments of ESM/EFSF loans in connection with its planned early repayment to lenders under the Greek Loan Facility (GLF).

The ESM Board also approved the use of resources from a special cash buffer account, which was established at the end of Greece’s adjustment program, to partially finance this prepayment.
Under Greece’s loan agreements with the ESM and EFSF, any early repayment to certain creditors – including GLF lenders – would normally trigger a proportional early repayment obligation to the ESM and EFSF as well.

Thanks to the waivers granted on Friday by the ESM and EFSF, Greece will no longer be required to make those corresponding early repayments.

“Greece continues to make steady progress in strengthening its economy. This additional early repayment to GLF lenders – the second largest to date – sends another positive signal to financial markets, reduces interest-rate risk for Greece, and improves the structure of its debt. The ESM and EFSF remain committed to supporting the Greek authorities in their efforts to promote long-term growth and debt sustainability,” said the managing director of the ESM and CEO of the EFSF, Pierre Gramegna.

The waivers and the use of the cash buffer were granted following a formal request by the Greek government, which proposed the early repayment of GLF loans originally maturing in 2029 and 2033-2035, totaling 6.94 billion euros. Following this transaction, the funds held in the cash buffer account will be fully exhausted.

The Greek Loan Facility (GLF) was part of the first financial assistance program for Greece, agreed in May 2010. It consisted of bilateral loans from 14 eurozone countries totaling 52.9 billion euros, of which 26.3 billion euros remains outstanding.

Greece completed the repayment of its loans to the International Monetary Fund two years ahead of schedule in 2022. The most recent early repayment of GLF loans took place in 2025.

amna.gr