Portugal has repaid €2.5 billion of its debt to the European Financial Stabilisation Mechanism (EFSM).
The repayment relates to financial assistance provided to Portugal between 2011 and 2014, the European Commission said in a release on Tuesday.
During that period, the country received €24.3 billion in loans from the EFSM — a European Union instrument designed to help member states facing major financial difficulties, managed by the Commission.
In previous years, Portugal had already made repayments totalling €2 billion in 2022 and 2023, leaving €19.8 billion of its EFSM loan balance still outstanding.
How the repayment works
The Commission stated that the money was repaid in cash, fully covering its financial obligations linked to the loan.
The Commission will add these funds to its general funding pool under a strategy known as “diversified funding”, which allows the EU to reuse funds for future assistance programmes.
The Commission explained that this transaction does not affect bonds currently issued to finance the original EFSM loans.
These bonds will remain in place until they reach maturity, meaning they will be paid back according to their original schedules.
The EFSM is one of several tools, alongside the European Financial Stability Facility (EFSF) and the International Monetary Fund (IMF), that provided support to Portugal during the Eurozone crisis.
