LUXEMBOURG (AP) – Greece avoided another potential brush with bankruptcy after striking a deal with European creditors to tide it over for the rest of the year and gained assurances that its repayment burden will be eased when it finally can stand on its own after nearly a decade on financial life support.
After months of haggling that raised fears of another escalation in Greece’s near eight-year debt crisis, the 19-country eurozone agreed late Thursday to clear the release of a further 8.5 billion euros ($9.5 billion) after the Greek government delivered on an array of reforms. Getting the money was becoming increasingly urgent as Greece has a big repayment hump next month.
Perhaps more importantly for the longer term, the so-called Eurogroup made clear that it is ready to ease the burden of Greece’s debt repayments at the conclusion of the current bailout program next year. The International Monetary Fund may also get involved financially, on a limited basis of up to $2 billion, but that still requires more detail on the debt relief on offer.
“Overall, I think this is a major step forward,” said Jeroen Dijsselbloem, the eurozone’s top official. “We are now going into the last year of the financial support program for Greece; we will prepare an exit strategy going forward to enable Greece to stand on its own feet again over the course of next year.”
He singled out the Greek people for their “intense efforts and resolve” over the past few years of the country’s bailout era when successive governments had to enact drastic spending cuts and tax increases in return for the money needed to avoid bankruptcy and a possible exit from the euro currency.