Greece aims to reduce its debt by about 20 percentage points in just four years, marking another milestone in its decade-long crisis exit, Finance Minister Kostis Hatzidakis told Bloomberg.

In an interview, Kostis Hatzidakis predicted that by the end of 2028, government borrowing will drop "to about 130 percent" of GDP.

What is helping Greece right now is an economy that is outperforming most European economies. Growth was 1.1% in the second quarter, while the eurozone as a whole grew just 0.2%.

Hatzidakis now estimates that the country's primary budget surplus will be 2.4% of GDP this year instead of the initial estimate of 2.1%. This gives the government room to increase spending. "Thanks to the better-than-expected budget performance, we can have a higher increase in spending compared to the initial estimates," Hatzidakis said. 

Greece will be able to increase its net spending by "a little over 3%" in 2025—up from the initial forecast of 3%—and will be able to continue to grow on average at the latter amount until the end of 2028, the minister said.

The government is also making early repayment of bailout loans totalling €8 billion ($8.9 billion), covering loan repayments from 2026 to 2028. This will be the third time it has accelerated the repayment of aid received in the first bailout program in 2010, Bloomberg notes.

All of these decisions underscore the strength of the economy and the government's determination to continue on a path of fiscal prudence, Hatzidakis said. 

He continued, "The rating agencies, various international organizations, and foreign investors fully understand this message." He continued, "Rating agencies, various international organizations, and investors abroad fully understand this message."

BANKS

The agency noted that the Greek government is also set to complete privatisations in the banking sector, which began almost a year ago with the complete withdrawal of the state from Eurobank Ergasias Services and Holdings SA, Alpha Bank and Piraeus Bank. 

In early October, the Hellenic Financial Stability Fund—a bank recapitalisation tool created at the start of Greece's bailout programs—plans to proceed with a further sale of a stake in National Bank of Greece SA.

"An additional sale of shares from those held by the HFSF is likely to take place in October—provided, of course, that market conditions are favourable," Hatzidakis said, without disclosing further details on the exact timing or size of the placement.

In order for the National Bank to have no competitive disadvantage compared to the country's other three big banks, "the government's intention is to abolish the special rights the state has over it," the minister added