The European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) gave the go-ahead to Greece’s early repayment of loans worth 5.29 billion euros, in a statement released on Tuesday.
Specifically, a statement said, the ESM and EFSF boards “agreed today to waive the mandatory proportional repayment obligation of ESM/EFSF loans in connection with an early repayment to Greek Loan Facility (GLF) lenders.”
The Board of Directors of ESM also approved the use of funds from a dedicated cash buffer account, created at the end of the adjustment programme, to carry out this prepayment, it said.
Under the ESM and EFSF loan agreements with Greece, upon early repayment to certain official creditors (including the GLF lenders), a proportional amount of the financial assistance provided under ESM and EFSF facilities becomes immediately due and payable. Thanks to the waivers granted today by the ESM and EFSF, Greece will not be required to make a proportionate early repayment to either institution.
“Greece continues to make notable progress in strengthening its economy,” ESM Managing Director and EFSF CEO Pierre Gramegna said. “This additional early repayment of the GLF loan sends another positive signal to financial markets, improves Greece’s debt structure, and reflects the country’s improving 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.”
