Greece has made a €2.5 billion repayment to the European Financial Stability Facility (EFSF), using money generated from the sale of stakes in Greek banks that had previously benefited from state support.
The payment, made Thursday, follows the reprivatization of banks that had received assistance through the Hellenic Financial Stability Fund (HFSF) during Greece’s financial crisis. The proceeds were subsequently held by the Hellenic Corporation of Assets and Participations (HCAP).
EFSF Chief Executive Pierre Gramegna said the repayment demonstrated the progress made in strengthening Greece’s economy and financial system.
He said the money generated through the return of Greek banks to private ownership reflected the banking sector’s recovery since the crisis. Using some of those proceeds to repay the EFSF, he added, would reduce Greece’s public debt while also providing a signal of confidence to financial markets.
Repayment rights linked to bank rescues
The latest payment follows a notification Greece sent to the EFSF and the European Stability Mechanism (ESM) on September 1.
Greece informed the two institutions that approximately €4 billion in proceeds connected to the HFSF was held by HCAP following the merger of the HFSF with the state asset-holding company.
The EFSF and ESM have contractual rights over proceeds originating from bank recapitalization operations associated with their financial assistance to Greece.
The EFSF exercised those rights over €2.5 billion of the available funds. The amount was directed to the EFSF because its loans to Greece carry higher costs than those provided by the ESM.
The two institutions will retain their rights over the remainder of the balance held by HCAP.
EFSF cuts 2026 funding needs
The repayment also affects the EFSF’s borrowing plans for the year.
Following the €2.5 billion payment, the EFSF has reduced its 2026 funding program to €16.5 billion, an amount it has already raised this year.
The transaction therefore allows Greece to use proceeds from the restructuring and reprivatization of its banking sector to reduce debt obligations tied to the financial assistance it received during the crisis.
Source: tovima.com
