Greece to Boost Debt Repayment to €13 Billion as Mitsotakis Prepares Tax Relief Package

Greece Accelerates Early Debt Buildup Ahead of TIF Speech

Greece is preparing another early public-debt repayment of around €13 billion in 2026, up from an initial target of €8.79 billion, according to government officials cited by iefimerida. The accelerated repayment is made possible by strong fiscal performance, the outlet reported, and comes as Prime Minister Kyriakos Mitsotakis prepares to deliver his annual policy address at the Thessaloniki International Fair (TIF) on the first weekend of September.

Mitsotakis is expected to use the speech to outline the government's economic policy roadmap through the 2027 elections, along with a strategic plan through 2030. Government sources told iefimerida that the announcements will emphasize permanent relief measures, including reduced tax and social security burdens, targeting the middle class, small and medium-sized businesses, and pensioners.

The €13 billion figure includes €6.94 billion repaid in June covering bilateral GLF loans, €2.5 billion in EFSF loan repayments, a €1.2 billion reduction in treasury bills, and early repayment of a €2.2 billion bond maturing in December 2027 — moves expected to generate €2.6 million in savings over the next seven years, iefimerida reported.

Mitsotakis Frames Debt Reduction as 'National Liberation'

Mitsotakis has put debt reduction at the heart of the government's economic narrative, describing it as a form of 'national liberation' and a matter of fairness toward future generations, according to pagenews.gr. The prime minister said €36 billion has already been repaid ahead of schedule since 2019.

"Reducing the debt is not some abstract concept. I would go so far as to say it is national liberation," Mitsotakis said, as quoted in a pagenews.gr report. He linked lower debt directly to the state's ability to support society and the economy.

"The faster we reduce this debt, the more the state can breathe. And when the state is not suffocating under its obligations, it can support citizens better, secure better borrowing conditions for businesses and ultimately create conditions for prosperity for everyone," he was quoted as saying.

He also framed the issue as one of intergenerational justice: "We cannot burden our children with bills that were created in the past."

Fiscal Performance and Ratings Outlook

Greece posted a primary surplus of €5.72 billion in the first seven months of the year, above the €4.41 billion target, according to budget figures cited by pagenews.gr. The stronger-than-expected performance is seen as providing additional room for debt reduction and targeted relief.

Public debt could fall to around 137% of GDP by end-2026, pagenews.gr reported, which could mean Greece ceases to be the EU country with the highest debt-to-GDP ratio, with Italy moving above it.

In a related development, Japan's R&I rating agency maintained Greece at investment grade but upgraded the outlook from Stable to Positive, as reported by pagenews.gr. This follows a series of ratings actions that have kept Greek debt at investment grade across major agencies.

Upcoming Credit Reviews and Market Implications

Greece is entering a new credit review cycle, with iefimerida reporting that Canadian agency DBRS will publish its assessment on September 4, followed by Moody's and Germany's Scope on September 18, S&P on October 23, and Fitch on November 6. Both DBRS and Scope currently rate Greece at investment-grade BBB, while Moody's rates one notch lower at Baa3, with S&P and Fitch also at BBB.

Analysts believe a further upgrade is possible given the accelerated debt reduction, iefimerida reported. With the faster repayment schedule, Greece's public debt is projected to fall below 110% of GDP by 2031 — a year earlier than previously forecast — from an estimated 136.8% this year, with a longer-term goal of dropping below 100% by the mid-2030s.

Mitsotakis's address at the Thessaloniki International Fair is expected to build on the government's fiscal achievements while outlining a forward-looking economic agenda, setting the stage for the 2027 elections and beyond.