Greece requests ESM agreement to repay part of IMF loans earlier
ATHENS, February 10 (Reuters) – Greece has filed a request with the European Stability Mechanism (ESM), the euro area bailout fund, to seek consent to repay a costly old debt to the International Monetary Fund, government officials said Wednesday.
The country has received three international bailouts from the euro area and the IMF worth 280 billion euros since 2010. It came out of its last bailout in August 2018 and relied on the markets of debt to cover its borrowing needs since.
Greece wants to repay about 3.3 billion euros ($ 4 billion) in debt to the IMF this year, out of a total of 5 billion euros in outstanding loans due by 2024.
The move allows Athens to reduce its debt servicing costs, as IMF loans bear higher interest than what Greece would now pay in the market.
“These are loans that expire in 2021 and 2022,” one of the officials told Reuters.
Under the terms of the bailout, repaying the IMF earlier would have triggered a proportional payment to the ESM, which is likely to waive that right, a second official told Reuters.
Athens prepaid IMF loans in November 2019. It has a cash reserve of around 32 billion euros, sufficient to cover debt maturing for at least two years. ($ 1 = 0.8248 euros) (Reporting by Lefteris Papadimas; Editing by Giles Elgood)