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greece loan extension

Greece and the eurozone finance ministers have reached a deal to extend its bailout by four months after talks in Brussels.

The extension will allow Greece to negotiate a follow-up arrangement with creditors.

“The Greek authorities have expressed their strong commitment to a broader and deeper structural reform process aimed at durably improving growth and employment prospects, ensuring stability and resilience of the financial sector and enhancing social fairness,” the Eurogroup said in a statement.

Dutch finance minister Jeroen Dijsselbloem, head of the Eurogroup, said that Athens had pledged to honor all its debts.

“This is a very positive outcome,” Jeroen Dijsselbloem told a news conference on Friday night.

“I think tonight was a first step in this process of rebuilding trust. As you know trust leaves quicker than it comes. Tonight was a very important, I think, step in that process,” he added.Greece bailout extension Eurogroup

Greece had agreed to present an initial list of reform measures by February 23, Jeroen Dijsselbloem said.

Athens welcomed the deal, which a Greek government official said gave it time to negotiate a “new deal”.

“Greece has turned a page,” the official said.

“We have avoided recessionary measures.”

Greece had been seeking a six-month extension of the bailout but the Eurogroup opted for four months.

The euro gained against the US dollar on February 20 following the announcement, adding 0.3% to $1.1403, while the Dow Jones industrial average and S&P 500 struck new intraday highs.

The agreement removes the immediate risk of Greece running out of money next month.

The new deal also provides a breathing space for the new Greek government to try to negotiate longer-term debt relief with its EU creditors.

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Greece has submitted a loan extension request to the eurozone on February 19 after weeks of wrangling over its international bailout.

The country is seeking a six-month assistance package, rather than a renewal of the existing deal which comes with tough austerity conditions.

Details of the request have not been made public, but any deal is likely to differ from the current bailout conditions set by the eurozone.

Eurozone finance ministers will meet in Brussels on February 20 to discuss the move.Greece loan extension request

The Greek request includes a pledge to maintain “fiscal balance” for a six-month period, while it negotiates with eurozone partners over long-term growth and debt reduction, Reuters has reported.

The government was also reported as saying that its extension proposal was in order to give Athens enough time, without the threat of “blackmail and time deficits”, to draw up a new agreement with Europe for growth over the next four years.

Greece faces running out of money by the end of the month without a deal.

The loan request follows days of negotiations between eurozone finance ministers and Greek government’s anti-austerity Syriza party.

It will now be reviewed by the eurozone leaders, as well as representatives of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission.

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