The deal means Greece will technically be free of the strict terms and conditions that come with three consecutive bailout programs over eight years | Hannelore Foerster/Getty Images
Greek deal paves way for August bailout exit
‘The Greek debt problem is behind us,’ says French Finance Minister Bruno Le Maire.
LUXEMBOURG — Greece secured a final payout of €15 billion in bailout cash from its eurozone creditors on Thursday night, paving the way for its program exit in two months’ time.
The creditors also granted Athens some debt relief by extending loan maturities due from 2023 by 10 years to help ease the country’s repayment burden over the next two decades. Athens is also expected to use some of its new cash to pay back expensive and short-term loans to the International Monetary Fund.
“The Greek debt problem is behind us,” said France’s finance minister, Bruno Le Maire, following a Eurogroup meeting in Luxembourg that ran past midnight. “Greece can now go forward in confidence.”
Thursday’s deal means that Greece will technically be free of the strict terms and conditions that come with three consecutive bailout programs over eight years that almost saw the country leave the eurozone.
Athens will also be able to issue debt in financial markets to fund its policies, supported by a €24.1 billion cushion that should protect Greece from any economic and financial shocks until 2020.
The IMF, meanwhile, will only provide technical advice to Greece and its creditors rather than officially participate for the remainder of the bailout program, which ends August 20.
The fund has consistently called on Greece’s creditors to grant the country more debt relief, or it would walk away from the bailout program altogether.
IMF chief Christine Lagarde told journalists that she is “very comfortable” with Greece’s debt in the “medium term.” But the Frenchwoman maintained that in “the longer term … we have reservations.”
The fund will start its audit of Greece “as early as next week.” It will also include a debt sustainability analysis.
Greece will face heavy scrutiny from the European Commission and its eurozone creditors, which have lent Athens some €240 billion and want to get their money back.
Monitoring teams made up of the IMF, the Commission and the eurozone’s bailout arm are set to scrutinize Greece’s finances four times a year for the foreseeable future to curb potential rollbacks on reform or irresponsible spending.
Greek governments will also have to maintain a budget surplus target of 3.5 percent of economic output for the next five years and then continue at a rate of 2.2 percent until 2060.