Greece agrees deal with eurozone creditors to extend rescue loans for another four months, Greece has struck an agreement with its eurozone creditors on extending its rescue loans by four months, in a deal that should allay fears that the debt-laden country could exit the single currency bloc as soon as March.
The deal, which comes after the third round of talks in just 10 days,removes the immediate risk of Greece running out of money.
It should also mean there will be no need for capital controls in the four-month period, and that Greek banks will have enough cash for their ATMS.
Yet, to receive the eurozone funding, Greece must put forward by Monday a series of unspecified reforms that are deemed acceptable by creditors.
If the list is approved, then it will be further detailed and agreed upon by the end of April.
These policy measures, which are likely to include measures such as tackling corruption and tax evasion, will be rooted in Greece’s previously bailout deal, yet this time Greece will be the author of the reforms pursued.
This represents a change from the past five years when Greece was effectively following orders to implement a series of austerity measures.
Jeroen Dijsselbloem, the chairman of the Eurozone group of finance ministers, said after Friday’s meeting in Brussels that ‘we have established common ground again,’ while Greek finance minister Yanis Varoufakis added the agreements allows both Greece and Europe ‘to turn a page ... As of today, we are beginning to be co-authors of our destiny’.
The agreement comes after a period of tense negotiations following the election win of the left-wing Greek party of Syriza, and just a week before Greece’s £156 billion bailout deal expires.
It is seen as an element of compromise by both sides, with German finance minister Wolfgang Schaeuble, who was the bulwark against the ambitions of the Greek government, emerging in conciliatory mood after the meeting.
'This is an important step forward,' he said.
Germany is Greece's biggest creditor, owed 50 billion euros as its share of the EU/IMF bailouts. As Europe's biggest economy, it would take a hit in the turmoil that might ensue if Greece defaulted and left the eurozone.
Greece’s newly-elected government, which is led by prime minister Alexis Tsipras, has also committed to honouring its financial obligations to all their creditors ‘fully and timely’. It has also promise to continue posting primary surpluses, managing however to convince creditors to cut the amount of that surplus following the worsening economic outlook for the country this year.
The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account’, said the eurogroup’s statement.
Earlier on today Chancellor George Osborne, who was not at the talks as Britain is not in the euro, warned the ongoing stand-off in the eurozone over Greece's debts poses a risk to Britain's economic stability.
Mr Osborne said that the eurozone countries must find 'a common solution' to ward off a full-blown crisis.
The Chancellor told Sky News: 'What you see now in this stand-off between the eurozone and Greece is the risk of a full-blown crisis which would do real damage to the European economy and is a risk to Britain.
'We need the eurozone to find a common solution and here at home we need to go on working through our economic plan, which has kept us safe.'
The deal, which comes after the third round of talks in just 10 days,removes the immediate risk of Greece running out of money.
It should also mean there will be no need for capital controls in the four-month period, and that Greek banks will have enough cash for their ATMS.
Yet, to receive the eurozone funding, Greece must put forward by Monday a series of unspecified reforms that are deemed acceptable by creditors.
If the list is approved, then it will be further detailed and agreed upon by the end of April.
These policy measures, which are likely to include measures such as tackling corruption and tax evasion, will be rooted in Greece’s previously bailout deal, yet this time Greece will be the author of the reforms pursued.
This represents a change from the past five years when Greece was effectively following orders to implement a series of austerity measures.
Jeroen Dijsselbloem, the chairman of the Eurozone group of finance ministers, said after Friday’s meeting in Brussels that ‘we have established common ground again,’ while Greek finance minister Yanis Varoufakis added the agreements allows both Greece and Europe ‘to turn a page ... As of today, we are beginning to be co-authors of our destiny’.
The agreement comes after a period of tense negotiations following the election win of the left-wing Greek party of Syriza, and just a week before Greece’s £156 billion bailout deal expires.
It is seen as an element of compromise by both sides, with German finance minister Wolfgang Schaeuble, who was the bulwark against the ambitions of the Greek government, emerging in conciliatory mood after the meeting.
'This is an important step forward,' he said.
Germany is Greece's biggest creditor, owed 50 billion euros as its share of the EU/IMF bailouts. As Europe's biggest economy, it would take a hit in the turmoil that might ensue if Greece defaulted and left the eurozone.
Greece’s newly-elected government, which is led by prime minister Alexis Tsipras, has also committed to honouring its financial obligations to all their creditors ‘fully and timely’. It has also promise to continue posting primary surpluses, managing however to convince creditors to cut the amount of that surplus following the worsening economic outlook for the country this year.
The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account’, said the eurogroup’s statement.
Earlier on today Chancellor George Osborne, who was not at the talks as Britain is not in the euro, warned the ongoing stand-off in the eurozone over Greece's debts poses a risk to Britain's economic stability.
Mr Osborne said that the eurozone countries must find 'a common solution' to ward off a full-blown crisis.
The Chancellor told Sky News: 'What you see now in this stand-off between the eurozone and Greece is the risk of a full-blown crisis which would do real damage to the European economy and is a risk to Britain.
'We need the eurozone to find a common solution and here at home we need to go on working through our economic plan, which has kept us safe.'
