Greece: Debt deal gives clarity to markets

Greece: Debt deal gives clarity to markets

The bailout fund will disburse €8.5bn (£7.4bn) to Greece, eurozone ministers said in a statement. “With unity and determination we move forward [to achieve] fair growth and heal the wounds of the crisis”, Tsipras said in a tweet after midnight.

But the issue has been complicated by disagreement between the Europeans and the International Monetary Fund, which participated in Greece’s first two bailouts, over the country’s growth potential and long-term debt sustainability.

“It’s not about giving Greece money, but rather about not giving Greece money”, he said, adding that the next steps were about “an ambitious growth program … based not on new debt, but on targeted initiatives to promote private investment in all of Greece”.

Mr Dijsselbloem says the exit strategy will “enable Greece to stand on its own feet again next year”.

BERLIN, June 15 Greek Economics Minister Dimitri Papadimitriou accused German Finance Minister Wolfgang Schaeuble of being “dishonest” by blocking debt relief for Greece despite his acknowledgement that Athens had implemented significant reforms.

“There won’t be a figure that rolls out”, said Jeroen Dijsselbloem, the Dutch finance minister who is the Eurogroup president.

Greece’s global lenders prepared on Thursday to unblock as much as 8.5 billion euros (7.44 billion pounds) in loans that Athens desperately needs next month to pay its bills, and to give some idea of what debt relief they may offer over the long-term.

The Eurogroup says it should be able to proceed with the next tranche of loans to Greece, after Eurozone states complete national procedures authorising it.

“I would like to announce my intention to propose to the IMF’s Executive Board the approval in principle (AIP) of a new IMF Stand-By Arrangement for Greece”.

Athens had insisted all week it would veto the deal, bitter that the latest disbursement would come without firm debt relief commitments after it delivered on tough reforms.

“We have been as constructive as possible while still respecting our principles because we are committing money from the global community”, Lagarde, a former French finance minister, said in defence of the fund.

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The euro zone has been reluctant to commit to concrete debt relief numbers now because it argues that if Greece does all that is required of it and keeps a high primary surplus – the budget before debt servicing costs – for decades, it may not need any debt relief at all.

Though the meeting won’t see any final decisions on the size of the debt relief, Dijsselbloem said discussions will center on what kind of measures will be offered.

Furthermore, the Eurogroup chose to extend maturities for the country’s loan payments by up to 15 years, if necessary.

The Greek government, whose popularity has fallen sharply as it imposed more austerity measures, faced more criticism Thursday when more than 2,000 elderly protesters marched through central Athens to demonstrate against pension cuts.

“We can’t live on 300 euros” they chanted.