Troika reimbursement gives one billion in 2021 Other Services

Ten years after the signing of the financial rescue agreement, Portugal will receive about one billion euros that it had to hand over to the creditors. In 2021, by Government accounts, Portugal will record the largest budget surplus in democracy.
In 2021, Portugal will receive the 991 million that it advanced to the European fund in 2011.

The next government will have a free play of about € 1 billion in 2021. In question is the return of an advance made to European creditors by Portugal in 2011 when the Economic and Financial Assistance Program (PAEF) was signed. This money will give a considerable room for maneuver that year, but will not be repeated thereafter.

Mário Centeno will have an extra "budget cushion" in two years.
The Stability Program 2019-2023 released this Monday, April 16, says that this amount (the technical term is "pre paid margins") will be delivered in 2021 and the amount predicted is 991 million euros.

In the current government accounts, this temporary revenue will make a positive contribution of 0.4 percentage points to the budget balance, which thus reaches a surplus of 0.9% of GDP. If it materializes, it will be the largest in democracy.

In 2016, 301.8 million euros had also been returned under the same scope, according to the accounts of the European Financial Stabilization Fund (EFSF) for 2017. Both discards occur in the respective maturity of the loans granted by this fund to Portugal in 2011 .

"The agreement established with the EFSF allows the reimbursement of the margins in the maturity of the loans, with the first maturing in 2016 and the second in 2021 occurring in the amount of 991 million euros," explains the Government in the update of the Stability Program .

But where does this money come from?

Let's go back to 2011. That year, the European Financial Stabilization Fund (EFSF), under the EAPF, demanded that Portugal make an advance payment (the pre paid margins) of 1.1 billion euros.

This amount was part of the guarantee structure that the fund built to obtain a credit rating and go to the market to finance itself to lend to the Portuguese State at a particularly difficult time.

Later, the Member States agreed to return this amount to Portugal, including the investment income that had since been paid from that amount. That is why, combining the revenue of 2016 with that of 2021 (1.3 billion euros) the amount is higher than the 1.1 billion euros initially delivered.

This advance was not only made by Portugal but also by the other countries assisted. It was the case of Ireland that also in 2016, given the maturity of the first EFSF loan, received € 554.9 million from "pre paid margins".

In all, the fund lent 26 billion euros to the Portuguese State, an amount that the Government intends to pay in advance, according to the Stability Program: "Portugal concluded at the end of 2018 the early repayment and full repayment of the IMF loan under the PAEF , now anticipating the start of prepayment to the European institutions ".

The EFSF was set up by the Eurozone Member States in June 2010 and was launched for Poland in May 2001. In 2 01 2 fo i s ub ti tio n of the Euro pean Stability Mechanism (ESM).