Greece 'turning a page' as eurozone declares crisis over

Adjust Comment Print

Finance Ministers from the 19 countries that use the single currency are seeking to agree on debt relief and a sizeable cash cushion for Greece that will reassure financial markets on the ability of Athens to stand on its own.

Including previous loans and financing Greece is drawing on, eurozone officials said the country will have a buffer of 24.1 billion euros that cover its financial needs for about 22 months after the end of the program.

But wary that future Greek governments might yield to pressure to reverse some of the unpopular reforms implemented under the bailouts, the euro zone will also seek to link some measures to compliance with agreed policies.

"It is a deal which reflects the moral duty of our partners in response to the sacrifices of Greek people over the past eight years, so that the euro zone remains undivided", Greek Prime Minister Alexis Tsipras said during a meeting here with President Prokopis Pavlopoulos to formally brief him on the outcome of Thursday's talks in Luxembourg.

Both these steps are part of a broader package of measures aimed to ensure that Greece will be able to service its debt over the next decades.

The Finance Ministers of the Eurozone, the Eurogroup, has reached an agreement that will put an end to Greece's third bailout program, the French Finance Minister said. "We believe that the adoption of the set of debt measures agreed by the Eurogroup will improve debt sustainability in the medium term". That left 2.5 billion euros in profit, plus interest of 400 million euros on a loan from the KfW development bank.

Greece's borrowing costs fell to four-week lows on Friday after the country was granted debt relief from the eurozone.

Europe's most indebted state will also be required to maintain a surplus before interest payments that's equal to 3.5 percent of its economic output and not accumulate arrears to vendors.

"We will continue to look at whether the reforms are sticking", Dutch Finance Minister Wopke Hoekstra said on Friday. It argued that the government failed to achieve high growth rates, which were the only way to alleviate the country's problems.

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.

Comments