Eurogroup agrees that Portugal can pay the IMF earlier, saying that the move is a sign of "significant progress."
The President of the Eurogroup, Jeroen Dijsselbloem, announced today that the Eurogroup is in favour of the Portuguese proposal to pay some Troika loans earlier, specifically around €14 billion of the €27.38 billion that Portugal owes the IMF.
Dijsselbloem commented that "like Ireland, Portugal is showing how quickly the country can return and stand on its own two feet."
At today’s Eurogroup meeting, the Eurozone finance ministers voted in favor of the proposal by Portugal to pay about half of its IMF loan early to benefit from lower interest rates on the open market.
The European Commissioner for Economic and Financial Affairs, Pierre Moscovici, also is in favour of the Eurogroup's decision to accept the Portuguese proposal.
For Moscovici, Portugal's initiative to pay off loans from the International Monetary Fund is a sign of "the significant progress the country has made since the beginning of the crisis."
IMF chief Christine Lagarde, recipient of the unexpected cash, said at the same press conference that the IMF approves. "It is with great joy that we consent to payment in advance, which shows that Portugal is doing much better."
Moscovici stressed that the advance payment will represent "a saving of around half a billion euros for Portugal", which will have "a tangible positive impact on the sustainability of Portuguese debt."
This is not a net loan repayment as all Portugal is doing is swapping high interest IMF loans with new loans taken out on the open market at lower interest rates.
The savings in interest over the term of the loan should be the €0.5 billion that Moscovici referred to.
The Eurogroup meeting today was really trying to focus on trying to find a compromise between the Eurogroup and the new Greek government. This part of the meeting ended without a decision.
