BRUSSELS (dpa-AFX) - After days of parleys with eurozone finance ministers, Greece has been granted an extension of four months to its bailout funding program. The deal comes as a small respite for the ailing country that recently came under the grip of an ultra-leftist government which threatened to exit the euro and soured ties with Germany and other eurozone countries.
The bailout extension will give negotiators time to work out a possible follow-up arrangement, a statement from the Eurogroup said.
The deal calls for Greek and European officials to agree to a series of reforms by the end of April.
But before that, Greece will present a first list of reform measures by Monday, which would be assessed and if found sufficient, could be the catalyst for a successful conclusion of the review. The review will be carried out Tuesday by representatives from the European Central Bank, International Monetary Fund and European Commission.
A successful completion of the review in turn will allow for any disbursement of the outstanding tranche of the current European Financial Stability Facility (EFSF) program and the transfer of 2014 Securities Markets Program (SMP) profit. Both are again subject to approval by the Eurogroup.
A surprising dimension to the deal is that Greece has agreed to retain current austerity measures even though the Syriza party, led by Prime Minister Alexis Tsipras, swept to victory last month on an anti-austerity platform.
Greece has committed to a broader and deeper structural reform process aimed at durably improving growth and employment, ensuring stability and resilience of the financial sector and enhancing social fairness. It will also undertake long overdue reforms to tackle corruption and tax evasion, and improving the efficiency of the public sector.
Greece also reiterated its commitment to honor its financial obligations to all creditors. Greece owes about 323 billion euros in debt and almost 60 percent of it is from the eurozone. IMF has provided 10 percent, European Central bank 6 percent and Greek Banks 3 percent of the loans, with 15 percent of the debt in the form of bonds.
The Eurogroup stressed that it remains committed to providing adequate support to Greece as long as it honors its commitments within the agreed framework.
While the four-month extension may only delay the inevitable, news of the deal has eased concerns about Greece making a destabilizing exit from the eurozone.
Following the bailout extension, global equity markets gained strongly and the euro rebounded against the dollar. Further developments regarding Greece could attract attention next week, although the focus is likely to shift to the outlook for U.S. monetary policy.
Copyright RTT News/dpa-AFX
© 2015 AFX News
