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Since its crisis began in 2010, Greece has received nearly US$316 billion in loans from multilateral agencies, making it the EU’s most indebted nation.
Greece plans to file a request this week seeking the European Stability Mechanism’s (ESM) - euro zone’s bailout fund - consent to repay earlier the billion-dollar loans owed to the International Monetary Fund (IMF).
“We are gaining points of (economic) freedom,” Primer Minister Alexis Tsipras said during an interview with Greece’s Antenna television. The Hellenic government wants to repay about US$ 4.1 billion in IMF loans, while the ESM would have to be repaid the same amount, under Greece’s bailout terms but is likely to waive this right. The loans expiring dates are set for 2019 and 2020.
This comes as IMF said on April 10 that the country is meeting its fiscal targets, achieving a primary surplus of 3.8 percent of GDP in 2018, while it foresaw a primary surplus of 3.5 percent of GDP for 2019. However, the price has been quite costly as austerity measures have devastated Greece’s social fabric.
Since its economic crisis began in 2010, Greece has received nearly US$316 billion in loans from multilateral agencies, making it the EU’s most indebted nation with a debt load equivalent to 180 percent of annual GDP.
The IMF took part in two rescue packages of US$271.67 billion that began in 2010 but stayed out of a third in the summer of 2015 for US$97.35 billion that Radical Left Syriza Tsipras accepted after saying he wouldn't due to austerity conditionalities. These include public sector layoffs, tax hikes, and pension cuts.
In 2018, unemployment rates were sitting at 18% and according to Eurostat data 35% of Greeks are poor and more than 20% have severe material deprivation.
"The government, which implements the same policies that have destroyed the people and the economy, is loading the back of workers and pensioners with new unbearable measures," the General Confederation of Greek Workers (GSEE) said in a statement during May 2018 nation-wide protests.
After almost a decade of austerity-induced measures, the leftist leader keeps promising relief measures, that for some have never unfolded. However, repaying earlier the loans the country will be a good step for the nation as this debt is more expensive than the yields Athens currently pays in the markets on its bonds.
Meanwhile, an ESM official said last week that Germany and the Netherlands were resisting the move, worried the IMF would want to withdraw from the periodical reviews of Greek reforms by its lenders. Yet a second source said that “the IMF will remain as an observer in Greece’s post-bailout surveillance program.”