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Euro zone bailout chief backs Greek plan for early IMF repayment in October

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By Reuters
Euro zone bailout chief backs Greek plan for early IMF repayment in October

HELSINKI (Reuters) – The head of the euro zone’s bailout fund, Klaus Regling, said on Friday he supported a Greek plan for the early repayment of part of the expensive loans the country got from the International Monetary Fund during the sovereign debt crisis.

At an informal meeting of euro zone finance ministers in Helsinki on Friday, Greek Finance Minister Christos Staikouras presented his plan to repay earlier about 3 billion euros of IMF loans, which carry a punitively high interest rate of 5.1%.

The partial repayment would reduce the current total IMF loans for Greece, which now stands at 9 billion euros.

“I welcome the intention to proceed with the early repayment of the expensive part of the IMF loans,” Regling said. “We will do the necessary preparations.

“All that can happen together with the assessment of the (Greek) budget for 2019 and 2020, when the (bailout fund) mission (to Greece) starts next month,” he said.

The euro zone bailout fund’s approval is necessary because under the lending deal Athens has with the euro zone, if it wants to repay early any creditors it has to offer proportionately the same deal to the euro zone as well.

The euro zone is Greece’s biggest creditor. Regling said the early repayment of the expensive IMF loans was good for the euro zone because it made Greek finances more sustainable and in this way made a repayment to the euro zone more likely.

(Additional reporting by Lefteris Papadimas; in Athens; Reporting By Jan Strupczewski; Editing by Giles Elgood)