Euro zone finance ministers agreed in the early hours of Friday a debt relief package for Greece and a new disbursement of 15 billion euros as part of its current 86-billion-euro bailout program, the head of euro zone finance ministers said.

The deal involves a 10-year extension of maturities on loans from the European Financial Stability Facility and a 10-year deferral on interest payments, Mario Centeno told a news conference.

Centeno added that this will allow Greece to issue bonds across the yield curve. Athens is also likely to pay lower borrowing costs on its new bonds as the new package of aid will help set up a cash buffer totaling 24.1 billion euros that would cover Greek financing needs for 21 months, Centeno said.

The International Monetary Fund welcomed on Friday the deal on debt relief for Greece, saying it will improve debt sustainability in the medium term, but maintained reservations on the long term.

“The additional debt relief measures announced today will mitigate Greece medium-term financing risks and improve medium term debt prospects,” the International Monetary Fund’s managing director Christine Lagarde told a news conference.

But she added that the fund will not join the expiring 86-billion-euro bailout as the time “has run out”, and maintained “reservations” on the long term sustainability of the Greek debt, which runs until 2060.

The fund will begin assessing the sustainability of the Greek debt “as early as next week”, Lagarde said, adding that the fund will remain engaged in Greece and will participate to the monitoring of the Greek economic performance and reforms after the end of the program.

Source: cnbc
Euro zone agrees on debt relief package for Greece