For once in a tie, Greek PM Tsipras hails new debt deal

For once in a tie, Greek PM Tsipras hails new debt deal

The finance ministers of the 19 European Union countries reached the compromise after a day of marathon talks in Luxembourg early on June 22.

The ministers needed to finalise a deal between Greece and its global creditors that would allow it to safely emerge from its third and final bailout program on August 20 and face the markets again.

Finance Ministers Euclid Tsakalotos told reporters the deal made Greek debt viable again and paved the way for a return to market financing.

The agreement will end the eight-year debt-relief program for Greece, in which the country received 300 billion euros in three financial assistance programs as agreed in 2010, 2011 and 2015 in exchange for structural reforms and fiscal adjustments.

The Eurogroup ministers reached an agreement in principle on the size of the last loan tranche to Greece and debt relief measure, early on Friday morning, according to a Eurozone source in Luxembourg.

Greece will also get a 15 billion euro new loan, which will take the total cash buffer with which it will leave the bailout on Aug 20 to 24.1 billion.

"From now on we have targets and we commit to observe them, but it is at the discretion of each Greek government to select the means for achieving these targets", Tsipras said.

The document foresees quarterly reviews of the country's finances by auditors representing the European Stability Mechanism, the European Commission, the European Central Bank and the International Monetary Fund.

In addition to the carrot of disbursements, creditors also count on the stick of rising bond yields, which would endanger the access of the sovereign and private companies to debt markets should Greece not comply with its commitments.

One of the final issues was how to let Greece spread some of its debt repayments over more years to make sure the cost of repaying the loans does not stifle the economy.

Greece "has fulfilled its obligations, and now the Eurogroup must keep its promises", MP Kindler said, calling for "substantial debt relief" for the troubled Mediterranean nation. The profit emerged from interest rates through purchases of Greek government bonds under the Securities Markets Program (SMP) of the European Central Bank (ECB).

And it provides the country with enough ready cash to coast it over almost two more years, without having to resort to expensive global bond markets after bailout loans run out in August.

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