Greece and its creditors in the 19-nation eurozone reached an agreement Friday on extending the country’s rescue loans, a move that should ease concerns it was heading for the euro exit door.
Jeroen Dijsselbloem, the eurozone’s top official, said a deal was agreed on that will extend Greece’s loans for four months, not the six months that the Greek government had requested on Thursday.
“We have established common ground again to reach agreement on this common statement,” Dijsselbloem said.
In return, Greece has committed to not take any measures that might affect the country’s budget targets. Greece has committed to provide a list of reforms based on its current bailout program for assessment on Monday.
The review will be carried out Tuesday by representatives from the European Central Bank, International Monetary Fund and European Commission.
“The institutions will provide a first view whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the (bailout) review,” according to the eurozone statement on Greece.
If the institutions don’t think the proposals are good enough, Greece would be facing financial trouble again. Its bailout ends after Feb. 28.
This list will then be further detailed and agreed upon by the end of April.
Dijsselbloem said Friday’s agreement was a “first step in this process of rebuilding trust” between Greece and its euro partners and allows for a strategy to get the country “back on track.”
“Trust leaves quicker than it comes,” he said.
Greek Finance Minister Yanis Varoufakis welcomed the deal, saying it is “a small step in the right direction.”
“We have avoided a choking deadline,” he told reporters after the meeting in Brussels. “We have a positive result.”
“The weekend will be one of joy and creativity. We are writing our own reforms,” he said.
The IMF also welcomed the agreement, with its Managing Director, Christine Lagarde, saying: “We are very pleased that work can actually begin.”