The European Financial Stability Facility (EFSF) decided on Thursday to reduce to zero the step-up margin accrued by Greece for the period between June 17 and December 31, 2022, as part of the medium-term debt relief measures agreed for the country in 2018.
The value of this eighth reduction amounts to 122.5 million euros, it said in a statement. The EFSF Board of Directors also decided to reduce the step-up margin to zero from January 1, 2023 onwards. This concludes the reduction of the step-up margin under the medium-term debt relief measures.
Additionally, as part of the debt relief measures, the European Stability Mechanism (ESM), acting as an agent for the euro area member states and after their approval, will make a transfer of approximately 603 million euros to Greece. This corresponds to the income earned on holdings regarding the Securities Markets Programme (SMP) and the Agreement on Net Financial Assets (ANFA).
"Greece has made continued progress with reform implementation, while capably dealing with the challenging economic fallout of the war in Ukraine. The European institutions had delivered a positive assessment regarding Greece’s reform commitments to be completed by autumn 2022. This cleared the way for this tranche of debt relief measures tied to those commitments. The total value of all the medium-term debt relief measures amounts to 11.5 billion euros," said ESM Managing Director and EFSF CEO Pierre Gramegna.
He added that "thanks to the comprehensive reforms that Greece has implemented over recent years, its economy has become much more dynamic and resilient. The country exited the enhanced surveillance framework and economic growth was among the highest in the EU in 2022. Responsible and sustainable fiscal policy should remain a priority, and further efforts should continue, particularly regarding the reduction and workout of non-performing loans, the clearance of arrears, primary health care reform, and labour legislation."
The step-up margin of 2% relates to the 11.3 billion EFSF loan for Greece (part of the second Greek programme), which was used to fund a debt buy-back in 2012.