EFSF approves upfront waiver facilitating Portugal’s additional early repayments of EFSM loans

(Luxembourg) - The Board of Directors of the European Financial Stability Facility (EFSF) today authorised the EFSF CEO, Pierre Gramegna, to grant waivers from Portugal’s mandatory proportional repayment obligation of EFSF loans, facilitating early repayments of the loan provided by the European Union under the European Financial Stabilisation Mechanism (EFSM). 

The decision facilitates early repayments of up to €2.4 billion by the end of 2026 and up to a further €2.6 billion by the end of 2027, following a formal request from the Portuguese authorities to undertake additional early repayments of their EFSM loans in 2026 and 2027.

Under the EFSF loan agreements signed with Portugal, an early repayment of EFSM loans triggers the repayment of a proportional amount of the financial assistance provided by the EFSF. The waivers would allow Portugal to continue repaying its EFSF loans according to the existing repayment schedule.

"Portugal’s economy continues to perform relatively well despite a challenging external environment. Additional early repayments of its EFSM loans could generate budgetary savings, further smooth the country’s debt structure, and send a positive signal to financial markets. In light of these encouraging developments, the EFSF is ready to support Portugal by facilitating these additional early repayments and congratulates the authorities on their ability to reimburse early. It proves the country is now performing well following the efforts made over the past years,” said Pierre Gramegna.

The financial assistance package provided to Portugal by the EFSF, the EFSM, and the International Monetary Fund (IMF) in 2011-2014 amounted to €78 billion. Each official creditor provided a third of the total amount. Portugal completed the early repayment of its IMF loans in December 2018 and made an early repayment of €2 billion of EFSF loans in September 2019. The first early repayment of the EFSM loans took place in December 2025.

The EFSM is a mechanism created by the European Commission in 2010 to provide financial assistance to EU countries experiencing or threatened by severe financial difficulties. The EFSM provided financial assistance to Ireland and Portugal between 2011 and 2014, and a short-term bridge loan to Greece in July 2015. Today, euro area countries in need of financial assistance are expected to seek support from the European Stability Mechanism.