Portugal will make an early repayment of €2 billion to the European Financial Stabilisation Fund (EFSF) next week.
Portugal will make an early repayment of €2 billion to the European Financial Stabilisation Fund (EFSF) next week for loans granted during the ‘troika’, the Deputy Secretary of State and Finance has told Lusa.
According to Ricardo Mourinho Félix, the date for the advance payment is not yet set, but it is certain that it will be “in October”, and should occur between the 15th and 17th.
Félix said that the advance payment of €2 billion euros to the EFSF will allow an accumulated interest saving of around €120 million, since the loans in question were only due to expire in 2025/2026.
“Early repayment] has the virtue, in addition to saving interest, of reducing what we have to pay in 2025 and 2026, which are years in which payments were particularly concentrated,” explained the secretary of state.
Although the loans to the International Monetary Fund (IMF) have already been disbursed, the EFSF and the European Stability Mechanism (ESM) have yet to be paid back.
In order for the repayment of the €2 billion to the EFSF to move forward, it was agreed that there would still be an advance payment of €500 million to the ESM by 2022, as set out in the European Commission’s report released on Tuesday following the tenth post-programme monitoring mission.
In addition, it was agreed that the €6.75 billion due to the ESM in 2021 “will be extended in terms of maturity to the following years, which will also allow the payment to be alleviated in 2025 and 2026, without increasing costs,” Félix said.
The EFSF Board of Directors approved on 5 September Portugal’s request to repay in advance €2 billion of the loans granted under this fund during the financial assistance programme (2011-2014).
In December 2018, Portugal completed the early repayment of IMF loans and then committed to the EFSF to pay this creditor up to €2 billion in advance between 2020 and 2023.
Last June, however, Mário Centeno acknowledged that Portugal could start the process of debt repayment to European creditors in 2019.