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Eurogroup to unlock 10-billion-euro bailout for Greece

Xinhua, May 25, 2016 Adjust font size:

Finance ministers from the Eurogroup have agreed to unlock 10.3 billion euros (11.5 billion U.S. dollars) of bailout money for Greece.

The long-delayed tranche will be disbursed to Greece in several steps, with the first 7.5 billion euros (8.4 billion dollars) in June, the ministers said in a statement after an 11-hour meeting that ended on Wednesday morning in Brussels.

The move came two days after Greek legislators approved fresh austerity measures including tax hikes and a new privatization fund.

Greece needs the bailout desperately to repay billions of euros in loans to the European Central Bank and the International Monetary Fund (IMF) in June and July.

However, the disbursements will be made on the conditions that Greece has fulfilled all prior austerity promises, and that the eurozone member states have endorsed the agreement in line with their national procedures, according to a statement of the finance ministers.

Last year, international creditors agreed to give Greece an 86-billion-euro (96-billion-dollar) bailout loan to avert its exit from the single currency club. However, the second tranche has been locked for months as Greece's austerity reforms being scrutinized by the international lenders.

At the same time, the Eurogroup meeting achieved a "major breakthrough" in the issue of Greek debt relief, which had been a major concern of the IMF.

"The possible debt relief will be delivered at the end of the program in mid-2018 and the scope will be determined by the Eurogroup on the basis of a revised debt sustainability analysis," the statement said.

The IMF insisted that Greece need "upfront" and "unconditional" debt relief, saying in an assessment on Monday that Greece cannot meet the terms of the bailout program and that interest payments on the soaring national debt would eat up 60 percent of the budget by 2060 if not given debt forgiveness.

The IMF believed that Greece needs longer time to repay loans, with the interest rate on its loans fixed at 1.5 percent, and its creditors should make debt relief automatic once the bailout program ends in 2018.

Germany argued that Greece had undergone enough reforms to meet its austerity targets, therefore it stands strongly against any debt relief for Athens. Endi