European officials have hailed a late night deal to unlock €10.3bn (£7.8bn) of much needed bailout cash for Greece as a major breakthrough.
However, in Athens unions threatened further strikes in protest aagainst the contentious pension and tax reforms which paved the way for the agreement to be reached.
After an 11-hour meeting in Brussels which ended in the early hours of Wednesday morning, eurozone finance ministers agreed to release two tranches of funds, €7.5bn in June and €2.8bn in September, and to implement measures to ease Greece’s €321bn debt mountain in a number of stages.
But the agreement represented a climbdown for the International Monetary Fund. It had wanted “upfront and unconditional” debt relief, something Germany successfully argued against.
The Eurogroup president, Jeroen Dijsselbloem, said the agreement was a major breakthrough, while the Greek finance minister, Euclid Tsakalotos, said it would help end the country’s vicious circle of austerity and recession. The IMF admitted it had made a significant concession in an effort to remain in the bailout process.
But debt campaigners criticised the lack of progress on debt relief and called for a significant cancellation of Greece’s liabilities. Ratings agencies Moody’s and Fitch, while welcoming the news, warned of the problems Greece faced in implementing the proposed reforms.
Markets reacted well to the deal, which could pave the way for the European Central Bank to start buying Greek debt once more as part of its quantitative easing programme.
Greek two-year bond yields fell 100 basis points to 7.2%, having earlier dropped to 6.77%, the lowest for six months.
Germany’s Dax added 1.47%, while Italy’s FTSE MIB rose 1.66% and Spain’s Ibex ended 2.3% higher.
But the Athens stock market closed virtually unchanged after earlier climbing 1.5%, as the threat of further strikes unsettled investors.
