Daily Times

BRUSSELS: Eurozone finance ministers have reached a deal with Greece to start debt relief for the country as demanded by the International Monetary Fund, and to release 10.3 billion euros ($12 billion) in bailout funds.

But analysts warned details are sketchy, spelling trouble further down the road. The agreement unlocks 10.3 billion euros ($12 billion) in bailout cash that Greece urgently needs to repay big loans to the European Central Bank (ECB) and International Monetary Fund (IMF) in July, having already fallen behind in paying for everyday government duties and wages.

The US-based IMF has made easing Greece’s huge debt burden a condition for its continued participation in the bailout programme, despite opposition from Germany to giving Athens more favours. The 19 ministers from the countries that use the euro met two days after Greek lawmakers passed yet another round of spending cuts and tax hikes demanded by its creditors.

After hammering out a deal at late-night talks in Brussels, Eurogroup chief and Dutch Finance Minister Jeroen Dijsselbloem said that the ministers had achieved a major breakthrough. The bailout rewards Athens for meeting the terms of its 86-billion-euro bailout programme agreed last July. Greece’s creditors will pay a first 7.5-billion tranche in June and the rest in a series of later disbursements.

Greek government bonds soared in response to the deal, pushing the yield on the benchmark 10-year bond to below 7 per cent for the first time since November. The Athens stock market also firmed, rising 0.8 per cent in early Wednesday business.