2024-10-03 09:23:25
A pending which would increase the public debt by approximately 25 billion euros at the end of 2032 and concerns interest on the loan of 90 billion euros that the country received from the EFSF in 2012 (second memorandum) closes. OR Eurostat has already informed the Greek authorities that half of them will be registered gradually by the end of 2024, changing the picture of the debt, since as a percentage of GDP will increase by about 5%.
Nevertheless, the financial staff does not seem to be worried by this development, as it recalls that there is a relevant provision in the new fiscal rules, based on which the recording of deferred interest from official loans in the public debt will not be taken into account in the evolution calculations Greek public debt. It is noted that this amount that accumulates annually (about 1 billion euros per year) is not “hidden” somewhere in accounting, but is entered every year in the official deficit, but not in the debt. That is, the amount exists in the official “books” of the government.
Also, based on the new fiscal rules, countries with a debt higher than 90% of GDP should record an annual reduction of at least one percentage point, a rule which even after the revision Greece exceeds. In fact, based on the new Medium Term 2025-2028, the average annual reduction of public debt is estimated at 1.85%.
As the Deputy Minister of National Economy and Finance, Thanos Petralias, explained, this amount will be distributed over the years, while he meaningfully added that the 7.9 billion euros have not been calculated in the scenarios that have been drawn up for the Greek public debt over the next 15 years. early repayment facility (GLF) since the time of the first memorandum.
It is recalled that within December the country will proceed with the early repayment of three more installments of the loan received by Greece under the first memorandum, totaling 7.9 billion euros. This amount concerns the installments for the years 2026-2028. For the payment of this amount, our country, for the first time, will use part of the “cushion” of cash reserves, amounting to 5 billion euros, with the consent of the European Stability Mechanism (ESM). It is recalled that the amount of 15.7 billion euros is reserved in a special account at the Bank of Greece and comes largely from the ESM loan (9 billion euros) and bond issues. This last installment of the ESM to Greece was provided from the balance of the €86 billion loan of the third memorandum (Greece had used only €61.9 billion of this loan). The condition was that these funds remain tied up in the Bank of Greece. The Public Debt Management Organization is preparing similar moves in 2025 as well.
According to information, in the next 24 hours the agreement for the concession of the Attica Road is expected to be completed with the payment of the price of 3.27 billion euros. This amount will also be allocated to reducing public debt, reducing it by around 1.5% of GDP.
In addition, the base year for calculating GDP changes, from 2015 to 2020, which is very likely to contribute to the upward revision of nominal GDP and thus the debt ratio, as the denominator which is GDP changes.
In the new Medium-term Fiscal-Structural Plan 2025-2028, which will be submitted to the Commission next week, the basic scenario foresees a reduction of public debt to 133.4% of GDP at the end of 2028 from 153.7% of GDP this year and to 114 .9% of GDP in 2038.