Eurozone ministers seek end to Greece bailout odyssey

Marco Green
June 24, 2018

This brings the final disbursement to €15 billion, according to several European Union officials familiar with the discussions.

The Greek government on Friday said the country was "turning a page" after eurozone ministers declared its crisis over as they granted Athens debt relief under a bailout exit strategy.

Greece has been living primarily on money borrowed from euro zone governments in three bailouts since 2010.

"The Greek government is happy with the agreement", Greek Finance Minister Euclid Tsakalotos said after the talks.

After eight years of harsh public spending cuts and economic reforms, Greece has reached a deal with creditors on debt relief. Over those years, Greece twice got perilously close to being kicked out of the eurogroup, EU Commissioner Pierre Moscovici said.

These measures will be linked to Greece's performance after the end of its bailout, and will be disbursed in slices over the next four years as long as the country doesn't stray from its pre-agreed reforms and budget path.

"But we should collectively find a way to alleviate the debt, either by extending the maturities of existing loans or by buying back the most expensive ones", he said.

The fund will begin assessing the sustainability of the Greek debt "as early as next week", Lagarde said, adding that the fund will remain engaged in Greece and will participate to the monitoring of the Greek economic performance and reforms after the end of the programme.

The reform-pushing International Monetary Fund played an active role in the two first Greek bailouts but took only an observer role in the third in the belief that Greece's debt mountain was unsustainable in the long term.

The senior European Union source said "it is a pity" that the IMF had forsaken participating in the third rescue but that the fund was involved on a technical level "and markets won't be shocked at all".

Greece's post-bailout future may not feel much different from the present, as it will include binding targets, compliance reviews, and even disbursements, according to an internal memo circulated among its creditors. "There will be no follow-up program in Greece".

To make sure Greece can choose the best moment to tap markets again, the euro zone also wants to provide Athens with a cash buffer of around 20 billion euros that would keep it independent of market borrowing for 18 to 24 months.

Other reports by Click Lancashire

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