What Price Does Greece Pay to Repay France’s Billion-Euro Loan?
Greece has undergone significant changes in managing its public debt over the past years. Once heavily critiqued for its enormous financial obligations, the country is now focused on repaying loans, including a substantial debt to France. This shift marks a notable transition since the financial aid received from the International Monetary Fund and the European Union beginning in 2010.
Current Debt Situation
As of 2025, Greece remains the most indebted nation in Europe, with a debt-to-GDP ratio of 151.2%. In comparison, France’s public debt stands at 115.8% of its GDP. Despite this, Greece has experienced a high growth rate coupled with strict budgetary discipline. These factors have allowed the nation to achieve a primary budget surplus, enabling early repayments to its creditors.
Repayments to France
In 2024, Greece repaid France €1.7 billion, and by 2025, this payment increased to €1.1 billion. Originally, these repayments were scheduled between 2033 and 2041 but have been accelerated significantly. This financial support is crucial for France, especially during its own public debt crisis.
Political and Economic Implications
Greek Prime Minister Kyriakos Mitsotakis has highlighted these repayment figures as evidence of his government’s fiscal responsibility. Joëlle Dalègre, an expert on modern Greece, notes that this positive news pleases both creditors and international institutions.
Challenges Amid Recovery
However, this impressive financial performance comes at a cost. The remarkable reduction in public deficits is a result of severe austerity measures. Tax collection has improved, with increased taxes and new taxes being implemented. However, these measures have been coupled with significant public spending cuts.
- Public sector salaries have been reduced by 30%.
- The 13th month salary and Easter bonuses for civil servants have been eliminated.
- Retirement benefits have decreased by 20% to 40%.
Additionally, the retirement age was raised to 67 years for full benefits. Joëlle Dalègre emphasizes that while Greece’s public finances are more stable, the overall economy still faces challenges. It heavily relies on international tourism, which has implications for resource management and environmental sustainability.
Social Effects of Austerity
Despite the apparent fiscal improvements, many Greeks feel the burden of ongoing austerity. A significant strike occurred on April 9, demanding wage increases and relief measures amid rising inflation and housing crises. Renewed protests in October highlighted dissatisfaction with new laws allowing longer working hours.
Joëlle Dalègre points out that the cost of living continues to outpace wages. The purchasing power of Greeks has declined since 2010, aligning closely with that of Bulgaria, which has the lowest economy in Europe. The social price of austerity is substantial, with many young Greeks leaving the country to seek better opportunities.
Poverty Rates
The European Committee of Social Rights reported a poverty rate of 19.6% in Greece as of 2023, compared to 15.9% in France. While Greece’s financial strategy has proven effective from a numerical standpoint, the human cost remains severe.
Ultimately, Greece’s journey to repay France’s billion-euro loan illustrates a complicated narrative of economic recovery, social hardship, and the implications of austerity measures on its citizens.
