Eurozone ministers strike deal to release funds to Greece

German Finance Minister Wolfgang Schaeuble (L) and Greece Finance Minister Euclid Tsakalotos (R)Image copyright
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The finance ministers of Germany and Greece shook hands on the deal

Eurozone ministers have struck a deal to unlock the latest tranche of Greece’s bailout cash.

The bailout fund will disburse 8.5bn euros (£7.4bn) to Greece, eurozone ministers said in a statement.

The latest tranche of the international bailout will help avert a fresh debt crisis in July when the next 7bn euro repayment of loans becomes due.

The payment is still subject to parliamentary approvals in some countries.

IMF director Christine Lagarde said she would propose an approval in principle to her executive board.

The IMF wants clarity on longer-term debt relief for Greece once the current funding scheme, worth up to 86bn euros, runs out next year.

Ms Lagarde said the IMF was ready to participate to the third bailout programme for Greece after the meeting of eurozone finance ministers in Luxembourg which capped months of negotiations.

However, the IMF could join the programme with a financial support “in the range of $2bn” only after a full deal on additional measures of debt relief for Greece.

Analysis: BBC economics correspondent Andrew Walker

Time was beginning to press for this payment. Greece has repayments on other loans due next month, which it could not otherwise have made.

The decision by Eurozone finance ministers reflects economic policy actions already taken by Greece and the new commitment by the International Monetary Fund’s managing director Christine Lagarde to recommend that her board contribute financially to this bailout.

It is however a qualified commitment that she has made.

She is proposing that any IMF funds be paid only when the Eurozone have made further commitments to ease Greece’s debt burden.

An IMF contribution was politically important for Germany especially to strengthen the perceived credibility of the bailout.

The eurozone group welcomed the financial and structural reforms enacted by Greece, including income tax and pension reform.

“I am pleased to announce we have achieved an agreement on all elements,” Eurogroup head Jeroen Dijsselbloem said.


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