Greek Public Debt falls by € 11.4 billion

8 May 2015 | Philip Ammerman

To Vima news is reporting today that, according to a report sent by Greece’s Public Debt Management Agency (PDMA) to Parliament, Greece’s debt has fallen to € 312.7 billion as of 31 March 2015.

This confirms Navigator’s estimate that debt has fallen due to the refund of unused guarantees from the Hellenic Financial Stability Fund (HFSF). Specifically, the HFSF returned € 10.933 bln of un-used EFSF bonds to the EFSF in February 2015.

According to previous PDMA Bulletins, Greece’s debt in the past three quarters was:

31 September 2015 € 321.7 bln

31 December 2015 € 324.1 bln

31 March 2015* € 312.7 bln

Greek debt declined by € 11.4 billion. The HFSF refund of € 10.933 accounted for the major share of the decline; the remainder includes the repayments of IMF loans in the first quarter of 2015.

We believe that while the remaining € 37.267 bln in EFSF bonds used as guarantees for the HFSF are prudently added to Greek public debt in line with accounting rules, in fact this amount reflects a “real asset” (pending restructuring of the Greek banking sector) and should therefore be allocated in a special category of debt. Such an accounting treatment, of course, is subject to a real recovery in the Greek economy.

To Vima reports the following break-down of Greek public debt, based on the PDMA report:

Greek Public Sector Debt € bln

Bonds 39.40

ECB SMT Bonds 19.80

Central Bank Bonds (ANFA) 7.30

Short-Term Bonds 14.90

Treasuries (repos) 9.80

EFSF Loans 130.90

IMF Loans 21.20

Eurozone Bilateral Loans 52.90

Central Bank of Greece Loans 4.30

Other Domestic Loans 0.11

Other International Loans 5.00

EIB Loans 7.09

Total 312.70

In line with previous posts, we believe that Greek debt is sustainable providing a political focus on rational economic policies exist and a pro-growth is implemented.

Philip Ammerman

* According to To Vima: the PDMA website does not show an updated debt level for March 2015 (as of 8 May 2015).