Greece just made a 'major breakthrough' in solving its debt crisis

Greece and its creditors have reached a deal that could prove to be a major step on the road to solving the stricken nation’s debt crisis, following nearly 12 hours of talks.

Late on Tuesday night and into Wednesday morning, representatives from Greece, the International Monetary Fund, and the Eurogroup agreed upon a series of loose measures to help restructure Greek debt when the country’s current bailout deal concludes in 2018. As it stands, that bailout is worth €86 billion (£65.4 billion, $95.8 billion.)

The creditors did not put any numbers on exactly how the restructuring will look, but one option includes reducing the exposure of the IMF — which has been the spearhead of these renewed talks — to the Greek bailout by buying out up to €14.6 billion of its loans.

The deal also includes the possibility of the eurozone handing over €10.3 billion of rescue loans to keep Greece solvent this summer.

The first part of that would be a a €7.5 billion cash injection at some point in June. It would be expected to tide Greece over until at least October, and would mark the first injection of money into Greece from outside since late in 2015.

Speaking at the conclusion of talks, Eurogroup president Jeroen Dijsselbloem said: “We have achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme.”

Dijsselbloem was not the only senior figure in the discussions to strike an upbeat tone about the restructuring, with the IMF’s Europe chief Poul Thomsen saying that the fund had made an “important concession” and that everyone involved in the talks had “shown flexibility.”

Thomsen added that: “These measures constitute a universe of measures that we think can deliver the necessary debt relief by the end of the period.”

Pierre Moscovici, the commissioner for economic affairs of the European Union, called the deal “a very important moment in a long and sometimes difficult story.”

While the deal is a substantial breakthrough in talks that have been struggling to reach any solid conclusions in recent weeks, nothing agreed has yet been completely approved, as all options are subject to the political agreement of eurozone countries.

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