Industry News

By Alexia Sotiriou

asotiriou@naftemporiki.gr

Greece plans to make additional early debt repayments of at least 5 billion in 2027, while keeping bond issuance limited to no more than 7-8 billion.

It has also pledged that public debt will continue to decline both in absolute terms and as a percentage of GDP, as it seeks to shield Greek government bonds amid a global market storm.

Rating review cycle

The country's autumn rating review cycle by foreign credit rating agencies begins recently, as the sell-off in bond markets continues unabated. DBRS kicked off the cycle on September 4, before the release of data on the performance of the Greek economy in the second quarter. This will be followed by dual reviews on September 18 by Germany's Scope and Moody's, while S&P Global will publish its report on October 23. Fitch will conclude the 2026 cycle on November 6.

As Greece's official financing programme is due to be published shortly before Christmas, officials at the economic policy team have already begun communicating the key priorities for next year. The main figures will also be incorporated into the draft budget, which is due to be submitted to Parliament in early October.

The plan for next year is to bring the debt-to-GDP ratio down to around 130%, its lowest level since the now-distant year of 2009. Over the medium term, the target is to reduce the debt-to-GDP ratio to around 113% by 2030, below the levels of Italy, France and Belgium.

Two key moves

To achieve these targets, the following steps will be taken:

1. No further market issuance in the remaining months of 2026.

Greece has fully funded its financing programme, largely insulating it from the surge in bond yields. The 10-year yield rose as high as 4.07% recently, its highest level since the summer of 2023.

Markets, however, continue to price the Greek 10-year bond below both Italian and French levels.

With no new borrowing and the early repayments already planned for year-end of the year — this time involving EFSF loans — Greece aims to reduce its public debt to 357 billion by the end of 2026, significantly below the 364.6 billion recorded in 2025.

The debt-to-GDP ratio is expected to come in at around 136%, 10 percentage points lower than in 2025. This 10-point decline is also expected to be enough to bring Greece's ratio below Italy's.

2. Further debt reduction in 2027, both in absolute terms and as a percentage of GDP.

Based on current data, public debt is projected to be contained at 355 billion, 2 billion lower than in 2026, allowing the debt-to-GDP ratio to fall further to 130%. This would be the lowest ratio since 2009.

To ensure these figures are achieved, two conditions will need to be met:

a) The 2027 financing programme should be kept to 8 billion, and potentially lower.

b) Further early debt repayments of at least 5 billion should be carried out. The amount could potentially be higher, depending on the evolution of the primary surplus.