Eurogroup deal on Greece gives positive market signal: Greek finance minister

Gladys Abbott
June 19, 2017

Speaking after a meeting of the eurozone's 19 finance ministers, Euclid Tsakalots said the country can "look forward with much greater confidence". "The € 8.5 billion will cover the big service payment due in July and domestic clearance arrears within the next few months", said Regling, to add that excluding debt service payments, he is confident that Greece will be able to build up cash buffer.

"I will be proposing to the IMF executive board the approval in principal of a new precautionary stand-by arrangement for Greece", IMF Managing Director Christine Lagarde said. In essence, that could mean payments could be postponed in the event of an adverse shock.

Furthermore, the Eurogroup made a decision to extend maturities for the country's loan payments by up to 15 years, if necessary. In addition, he said Greece's growth levels could be taken into account in its repayments.

Eurozone finance ministers and the International Monetary Fund agreed in Luxemburg on Thursday to release a further tranche of funding for Greece.

"There is now light at the end of the tunnel", Tsakalotos said.

Moscovici expressed his hope that the "spirit" was there for Greece's relations with its creditors to move to a "new phase".

Lagarde praised Thursday's loan agreement, stating that Athens would now be protected from future crisis moments because its financial needs in terms of debt service will be low.

The 8.5 billion euros of loans from the euro zone's 18 other states, including Berlin which is wary of easing terms for Greece ahead of a German election in September, lets Athens avoid defaulting on bailout repayments next month and recognizes unpopular cuts and reforms the left-wing government has made.

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"We can't live on 300 euros" they chanted, with some waving sticks.

The meeting is set to decide on whether Greece has done enough for the bailout funds to be released and provide more clarity over what sort of debt relief the country can expect when it exits its bailout program next year.

Debt relief is needed to help Greece expand its economy, he said, noting that Athens was not asking for a debt cut, but rather lower interest rates or longer repayment schedules.

The eurozone's top official, Jeroen Dijsselbloem, sought to downplay expectations that the full-scale of the debt relief on offer will emerge Thursday.

Greece almost crashed out of the euro in 2015 after a furious fight over the bailout deal, and says its fragile recovery has suffered from the most recent delay. Before deciding whether to participate in the latest deal, the International Monetary Fund has wanted more information about what debt relief Greece may get, to see if the debt burden will be sustainable in the long run.

The country, which has been promised help on its mountain of debt once its bailout ends next year, is again the main topic of discussion at a meeting of the so-called eurogroup Thursday.

The clock is ticking as the Eurozone works to reach an agreement on bailing out Greece today.

Greek Prime Minister Alexis Tsipras has repeatedly said that debt relief is necessary to get the Greek economy back on track and has indicated that he would be prepared to request a summit of eurozone leaders if no debt relief deal is secured Thursday.

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