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Eurozone agrees ‘breakthrough’ deal with Greece

As a result of the talks in Brussels, a deal has been reached to further unlock €10.3 billion in loans from Greece’s international creditors (1).

During talks lasting into the small hours of Wednesday, Eurogroup finance ministers agreed to release €10.3 billion in new funds for Greece in recognition of painful fiscal reforms pushed through by Prime Minister Alexis Tsipras’ leftist-led coalition, subject to some final technical tweaks (2).

The International Monetary Fund (IMF) has been at odds with the Eurogroup of eurozone finance ministers for months over the issue of debt relief for Greece. The IMF considers debt relief essential, but Germany in particular was opposed. Now that a deal has been reached, the IMF will consider contributing to the bailout (3).

Financial markets welcomed the agreement, which averts a repeat of last year’s Greek default to the IMF, that took it to the brink of exit from the euro area, and threatened wider destabilisation of the 19-nation currency zone (2).

Board level approval is still required for the IMFs continued participation in the Greek bailout. The organisation says Greek public debt is unsustainable at current levels of about 180% of Greece’s gross domestic product (GDP) (3).

IMF European Director Poul M Thomsen said: “We welcome that it is recognised that Greece needs debt relief to make that debt sustainable and it can’t do it on its own” (3).

  1. (1) – Eurozone agrees ‘breakthrough’ debt deal with Greece – Telegraph
  2. (2) – Euro zone, IMF reach compromise deal on Greek debt relief – Reuters
  3. (3) – Greece bailout: Eurozone deal unlocks €10.3bn – BBC News