Greece Moves to Accelerate Debt Reduction in 2026
Greece plans to repay 8.79 billion euros in 2026, marking the first time it will advance repayments on loans from the second bailout program. The country is placing early debt reductions at the core of its financial strategy, with a focus not only on Greek Loan Facility repayments but also on liabilities owed to the European Financial Stability Facility. Total financing needs for 2026 are estimated at 24.677 billion euros, including 8.871 billion in maturities, 5.2 billion in interest costs, 6.739 billion in various obligations, 1.587 billion in capital increases, and 8.79 billion specifically allocated for early repayments.
Greece has steadily followed a prepayment strategy since 2022, when it settled its IMF loans 2 years early and began advancing GLF repayments. The scale of the 2026 plan, however, represents an unprecedented effort in terms of volume. According to the breakdown, 5.3 billion euros will go toward accelerating GLF installments originally due between 2033 and 2041, at least 1 billion will reduce the T bill stock, 1.5 billion will cover bond buybacks, and 1 to 1.5 billion will be dedicated to early EFSF repayments.
Funding for the EFSF component will draw partly from the Hellenic Corporation of Assets and Participations, whose reserves amount to roughly 4.5 billion euros and are counted within overall state cash holdings. The aim is to ease future financing needs at a time when EFSF loans run until 2070 and total 125.7 billion euros, while ESM loans amount to 59.4 billion and mature between 2033 and 2060.
Portugal provides the model Greece plans to follow, having initiated early EFSF repayments in 2022 and completing another round just days ago. The Portuguese assistance package between 2011 and 2014 totaled 78 billion euros from the EFSF, ESM, and IMF, each supplying one third. Portugal finished its IMF repayments in 2018, prepaid 2 billion euros to the EFSF in 2019, and repaid an additional 2.5 billion this December.
Greek prepayments will rely on state reserves projected at 39 billion euros at the end of 2025 and expected to decline to about 29 to 30 billion euros in 2026. The 5.3 billion destined for GLF early repayment will come from the 15.7 billion euro ESM buffer created in 2018, which is being fully utilized. The Public Debt Management Agency intends to use 11.8529 billion euros from reserves next year and issue 8 billion euros in bonds, while the state also anticipates 4.2 billion euros from EU inflows and 0.618 billion from equity and investment returns.
The government remains committed to repaying GLF liabilities 10 years ahead of schedule, targeting full settlement by 2031. This year marked the start of early repayment of longer dated installments maturing between 2033 and 2041, a process that will continue. To date, Greece has repaid 26.6 billion euros of the original 52.9 billion GLF package, leaving 26.3 billion outstanding. By the end of 2026, the remaining balance will fall to roughly 21 billion euros, which is expected to be cleared with annual payments of 5 to 5.5 billion in the 4 years that follow.
Public debt is forecast to decline by 5.461 billion euros in 2026, with the debt to GDP ratio dropping to 138.2 percent from 145.9 percent this year. The medium term targets place the ratio at 119 percent by 2029, supported by expectations that Greece will no longer be the most indebted Eurozone country by 2030.
Scope Ratings More Upbeat Than Government
Scope Ratings takes an even more optimistic view, estimating that Greece will surpass Italy by 2027, reaching a debt ratio of 134 percent compared with Italy’s 137 percent.
Moody’s Forecasts One of the Largest Global Reductions
Moody’s expects Greece to post one of the world’s biggest debt reductions in 2026 thanks to consistent fiscal discipline at a time when most major economies are likely to see rising debt ratios.
Fitch Sees Continued Momentum
Fitch projects that Greek debt will keep falling rapidly, approaching 120 percent of GDP by 2030, underpinned by nominal GDP growth of around 4 percent and primary surpluses of 3.5 percent beyond 2027.
