Eurozone reaches breakthrough on Greek bailout and debt relief - as it happened

Eurozone ministers are finally heading to their beds, and the frazzled Brussels press pack are heroically filing copy.

So let’s have a brief recap.

Greece has finally received the green light to receive more than €10bn in bailout funds, easing concerns that it could face financial peril this summer.

After a marathon meeting in the Belgian capital, creditors agreed that Greece has done pretty-much everything required under its bailout

A few prior actions do remain, concerning pensions and privatisations, but once that is resolved, the money will flow -- starting with €7.5bn in June.

Eurogroup president Jeroen Dijsselbloem told reporters that Greece’s programme was back on track.

“We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme,....This is stretching what I thought would have been possible not so long ago.”

In an important development, the International Monetary Fund has signalled that it could join the bailout. That could happen by the end fo 2016.

However, European chief Poul Thomsen insisted that the Fund must check that the eurozone is offering substantial debt relief.

Thomsen said:

We welcome that all stakeholders recognise that Greek debt is unsustainable. We welcome that it is understood that Greece needs debt relief to make it sustainable.

Crucially, Eurozone ministers have agreed to “a package of debt measures” to make Greece’s debts sustainable.

That will start with short-term tweaks to Greece’s debts, to smooth out its obligations.

Medium-term measures are also promised, although not until 2018, which looks like a concession from the IMF.

There is also a commitment to consider whether further restructuring will be needed once the bailout ends, assuming Athens sticks to the programme and everything works out.

The deal has been welcomed by Greece’s finance minister. Euclid Tsakalotos said it would help end the country’s vicious circle of austerity and recession.

Donald Tusk, the head of the European Council, said the Greek deal was good for the global economy.

Slovakia’s finance minister Peter Kazimir also sounded satisfied, comparing the negotiations to “a complicated birth”.

And France’s Michel Sapin was positively upbeat, saying the deal was “first and foremost a declaration of confidence in today’s Greece.”

Some questions remain, over the details of the debt relief, whether it will satisfy the IMF, and whether Greece can ever exit its financial crisis while sticking to the tough terms of its bailout.

We’ll consider them tomorrow later today.

Until then, goodnight! GW

It’s late, but Bruno’s brain is still whirring.

Greek finance chief Tsakalotos added:

“I think there is some ground for optimism that this can be the beginning of turning Greece’s vicious circle of recession-measures-recession into one where investors have a clear runway to invest in Greece.

(via Reuters)

Down the corridor, Greek finance minister Euclid Tsakalotos has told reporters that today’s deal is an ‘important moment’ (echoing Dijsselbloem, Thomsen and Moscovici)

Donald Tusk, president of the European Council, has hailed the agreement - which comes as world leaders head to Japan for a G7 meeting.

And finally.... Jeroen Dijsselbloem insists that the eurozone would not ‘go it alone’ without the International Monetary Fund.

If, hypothetically speaking, the Fund found it couldn’t back the package then the two sides would work together to find a solution, he says, promising that:

We will stay in close co-operation with the IMF.

And that, blessedly, is the end of the press conference, at almost 3am in Brussels.

Ah....

Bruno Waterfield of the Times is concerned that the measures agreed tonight aren’t actually quantified. Why not?

Poul Thomsen says Europe can deliver the measures which the IMF has been calling for. He agreed that they need to be quantified, before the Fund can come on board.

The key is that Greece must be able to stand on its own at the end of the programme period (in 2018)

And Thomsen warns that he will not ask the Fund’s board to join the bailout programme otherwise.

Q: When will the eurozone decide the details of medium-term debt relief? Not until after the German elections?

Dijsselbloem claims he doesn’t know when those elections are! (I think they could be in August 2017, or later).

He then explains that the Greek deal expires in 2018 - so if the programme is completed, we will draw up a new debt sustainability analysis.

He also insists that the package hammered out for Greece is truly ambitious, Ministers have “stretched their political capital” to get this deal on the table, Dijsselbloem adds.

Q: Today’s debt relief measures seem weaker than what the IMF has been proposing, so is there a danger that it fails your debt sustainability test?

Poul Thomsen says the IMF will assess the latest proposals (online here) and see if they go far enough.

[On Monday, the IMF argued that the eurozone should grant Greece debt relied until 2040 -- today’s measures don’t go that far]

Onto questions.

Q: What has to happen before Greece receives its bailout funds?

ESM chief Klaus Regling says some additional steps are needed on privatisations, pensions and non-performing loans.

View image in fullscreen

Now the IMF’s European chief, Poul Thomsen, speaks!

He says the Fund welcomes the “important package of measures” which Greece has adopted. All sides have had to compromise.

And Thomsen then turns to the big issue - debt relief.

We welcome that all stakeholders recognise that Greek debt is unsustainable. We welcome that it is understood that Greece needs debt relief to make it sustainable.

And we welcome that there is agreement on the methodology and the objectives of what debt relief will achieve.

The IMF will now spend some time analysing the short-term debt relief measures being taken.

And crucially he confirms that IMF staff will recommend joining the bailout by the end of 2016, as long as the debt sustainability analysis shows that the measures on the table will work.

Ultimately, though, it’s a decision for the Fund’s board.

Onto the details....

The boss of the ESM bailout fund, Klaus Regling, says Greece needs to complete the outstanding ‘prior actions’ previously agreed with its lenders.

Then national governments must give their approval, before the first portion of the bailout funds - worth 7.5 billion euros -- can be handed over in June.

European Commissioner Pierre Moscovici says the eurogroup has reached a good agreement.

It opens the way to rebuild confidence and create a “lasting economic recovery in Greece”.

Moscovici adds:

It is a very important moment in this long and sometimes difficult journey”

Sometimes?!