Greece has taken the first step to repay €3.9 billion of bailout loans from the International Monetary Fund, while a cash boost from a grant given by Luxembourg marks another positive milestone for Athens.

The European Stability Mechanism’s (ESM) Board of Governors did not object to the request, which was presented at a meeting of senior officials from Eurozone finance ministries. This may mean that Greece could implement its longtime ambition go repay part of the IMF’s expensive loans, using cheaper funds, as Athens looks to bring down its refinancing costs in the same that Ireland and Portugal did in recent years.

The European Financial Stability Facility (EFSF) in Luxembourg, following a decision of the Eurozone Finance Ministers, opted to repay Greece a total of €103 million. At the same time, the ESM chose to transfer an equivalent amount of funds obtained via holdings with the Securities Markets Programme and the Agreement on Net Financial Assets.

“After the end of the ESM program, Greece committed itself to continue to implement the key reforms approved under the programme,” said Klaus Regling, the CEO of the ESM and the EFSF. “Today’s EFSF’s decision not to charge the room for growth shows that the Greek government is meeting its reform commitments,” he added. “Continuing the reform process will boost Greece’s growth potential and strengthen the country’s economy we will also push Greece to repay its loans.”

The release of the first tranche of medium-term debt measures was endorsed by the Eurogroup in its statement of 5 April. This was based on an assessment by the European institutions that Greece had taken the necessary steps to achieve all of the specific reform commitments that were to be completed by the end of 2018.

Having already successfully completed two bond sales this year, Athens is now considering selling more debt in the second quarter of 2019. This is most likely to take place in May and is expected to further augment Greece’s cash reserves, which currently stand at €34 billion.