Amid uncertainty due to developments in the Middle East and expectations that the European Central Bank will probably raise its key interest rate next Thursday, Greece is set to proceed with another early repayment of instalments related to its first bailout programme loan.The repayment concerns 6.94 billion euros out of the 26.3 billion euros still outstanding under the facility, with the remaining instalments expected to be repaid by the end of the decade at a pace of approximately 5 billion per year. As a result, Greece’s public debt is declining not only as a percentage of GDP but also in absolute terms. Following the repayment of the bilateral Greek Loan Facility (GLF) obligations, attention will shift to liabilities owed to the European Financial Stability Facility, which currently amount to 125.6 billion euros.The 6.94-billion-euro payment, scheduled for mid-month, covers maturities falling due in the first half of 2029, all instalments due in 2033 and 2034, as well as maturities in the first half of 2035 under the first bailout loan programme.According to the Prime Minister, the government aims that Greece will no longer hold the highest public debt ratio in Europe by the end of 2026.Benefits for GreeceThe conflict in the Middle East has generated volatility in sovereign bond markets, pushing yields higher and increasing borrowing costs for governments.By proceeding with this latest early repayment—six months earlier than in previous years—Greece is expected to achieve savings of approximately 100 million euros in annual interest expenses in 2026 alone. Furthermore, the move is expected to strengthen the country’s credibility in international financial markets and could contribute to lower borrowing costs in the future.At the same time, the Greek government intends to fully utilise the 15.7 billion euro liquidity buffer established under the third bailout programme in 2018 and held in a dedicated reserve account. The state’s liquidity buffer will consist exclusively of the current cash reserves of public-sector entities. These resources will function as active capital, linked to loans from the Recovery and Resilience Facility and state participations in creditworthy enterprises backed by tangible collateral.The government’s strategy is to repay bailout-era loans a full decade ahead of their final maturity dates, targeting complete repayment by 2031. The objective is to accelerate the reduction of public debt while generating substantial interest-cost savings.Public Debt Reduction RoadmapThe key targets for Greece’s public debt are:By the end of the current decade, public debt is expected to decline to between 113% and 115% of GDP. At that level, Greece would rank fourth or even fifth among EU member states with the highest debt ratios, falling below countries such as France, Belgium, and Italy.By the middle of the next decade, around 2035, public debt is projected to continue its downward trajectory and reach approximately 100% of GDP. During the same period, Greece’s sovereign credit rating is expected to return to the A+ category it held prior to the debt crisis.