Greece’s international creditors have bought time to secure the country’s financial future after agreeing broad but inexact principles to ease its debt mountain and break an impasse between Germany and the International Monetary Fund.
After almost 11 hours of talks in Brussels, eurozone finance ministers and the IMF agreed to a range of measures to restructure Greece’s debts when its €86bn bailout ends in 2018 — but put no figures on the concessions and left them subject to political decisions by eurozone countries. Most significant decisions would be taken after the German federal elections next year.
One of the debt relief options involves dramatically reducing the IMF’s exposure to the Greek programme by buying out up to €14.6bn of its loans. For now, the IMF said it would participate financially in the programme at some stage later this year — a crucial demand for Germany — but only if the eurozone committed to a scale of relief that meets the fund’s normal lending guidelines.
“We have achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme,” said Jeroen Dijsselbloem, president of the eurogroup.
While still a work in progress, the outline deal allows the eurozone to extend €10.3bn in rescue loans to keep Greece afloat this summer, beginning with a €7.5bn cash release next month. The loan is the first injection of bailout funds since the end of 2015 and is expected to see Greece through to at least October.
The measures will be the first time Athens will be afforded debt relief by its official-sector creditors since November 2012. The package included short, medium and long-term debt relief aiming to ensure Athens’ debt financing costs do not exceed 15 per cent of national income until 2030, and 20 per cent after that.
Source: All text from FT.com
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