Greece clinched additional loans from its international creditors to the tune of 10.3 billion euros on Wednesday, while Eurogroup finance ministers agreed to offer debt relief extending the repayment period and capping interest rates.
The future of Greece’s bailout funding was up in the air after disagreement between the International Monetary Fund (IMF) and the Eurogroup of finance ministers over the issue of debt relief.
Greece owes its international creditors more than 300 billion euros — approximately 180 percent of its annual GDP — and was relying on this tranche of funding to meet debt repayments due in July.
The tourism sector, a leading driver of the Greek economy, was on the edge ahead of the decision but earlier on Wednesday the president of the Greek Tourism Confederation (SETE) Andreas Andreadis expressed his satisfaction with the debt deal via his twitter account.
The finance ministers described the Brussels pact as a “breakthrough” and said it was achieved thanks to Greece’s economic reforms. Two days before the deal, Greek parliament approved of yet another round of fiscal reforms including tough spending cuts and tax increases demanded by its international creditors amid strong opposition.
“We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance program,” Eurogroup President Jeroen Dijsselbloem said on Wednesday, adding that the package of debt measures would be “phased in progressively”.