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Greece bailout: Eurozone agrees 'breakthrough' debt deal Greece bailout: Eurozone deal unlocks €10.3bn
(about 5 hours later)
Eurozone finance ministers have agreed to extend further bailout loans to Greece as well as debt relief, in what they call a "major breakthrough". Greece has agreed a deal to unlock a further 10.3bn euros ($11.5bn; £7.8bn) in loans from its international creditors, after talks in Brussels.
After late-night talks in Brussels, the ministers agreed to unlock 10.3bn euros ($11.5bn; £7.8bn) in new loans. Eurozone finance ministers also agreed to potentially offer Greece debt relief - a concession that was necessary to keep IMF on board.
The move came two days after the Greek parliament approved another round of spending cuts and tax increases demanded by international creditors. The 19 ministers said the deal had been made possible by Greece's economic reforms and called it a breakthrough.
The ministers also said debt relief would be eventually offered to Greece. Greece needed this tranche of cash to meet debt repayments due in July.
This had been a key demand from the International Monetary Fund (IMF), which says public debt is unsustainable at current levels of about 180% of Greece's gross domestic product. Offering debt relief to Greece had been a key demand from the International Monetary Fund (IMF), which has been at odds with the Eurogroup (the 19 eurozone finance ministers) for months over the issue.
The deal was announced after 11 hours of talks between the 19 eurozone ministers - known as the Eurogroup. Germany in particular has been opposed to the idea of reducing debt - a so-called "haircut".
Greece's debt jargon explained
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"We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme," Eurogroup President Jeroen Dijsselbloem told reporters early on Wednesday."We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme," Eurogroup President Jeroen Dijsselbloem told reporters early on Wednesday.
He said a package of debt measures would be "phased in progressively", adding that he was "glad to confirm" the IMF would now stay on board. He said a package of debt measures would be "phased in progressively".
Poul M Thomsen, director of the IMF's European Department, welcomed the recognition that Greek debt was unsustainable and relief was needed. This review was the first under Greece's third eurozone bailout, secured in August last year, after which Prime Minister Alexis Tsipras called a snap election.
He warned, however, that the IMF board in Washington still had to agree to the fund's participation. He also said that the extent of debt relief was still not clear. The move came two days after the Greek parliament approved another round of spending cuts and tax increases demanded by its international creditors.
The IMF and the Eurogroup have been at odds for months over the issue of reducing Greece's debt.
The Greek parliament passed new budget cuts and tax rises at the weekend, in order to unblock much-needed aid to help meet the country's debt repayments over the coming months.
The bill also created a state privatisation fund requested by eurozone finance ministers.The bill also created a state privatisation fund requested by eurozone finance ministers.
Opponents of the measures demonstrated outside parliament on Sunday.Opponents of the measures demonstrated outside parliament on Sunday.
The government, led by the leftist Syriza coalition, agreed to a third bailout worth €86bn (£67bn; $96bn) last year. The Greek government, led by the leftist Syriza coalition, agreed to a third bailout worth €86bn (£67bn; $96bn) last year.
Debt repayment The Washington-based IMF will still have to give final approval at board level to the fund's 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.
Spokesman 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."