June 22, 2018
Greece’s euro-area creditors struck a landmark deal to ease repayment terms on some of the nation’s mountain of debt, clearing the way for the country to exit the lifeline that’s kept it afloat since 2010.
The debt compromise reached in Luxembourg by the bloc’s finance ministers comes after months of acrimonious talks and just as the Mediterranean nation is set to leave its bailout program in August. A deal to ease Greek debt has long been seen as a key ingredient in the country’s successful return to economic health and foray back into financial markets.
An accord was reached in the early hours of the morning as attempts to find a compromise repeatedly hit a wall. The biggest holdout was Germany, which resisted granting Athens more money. In the final compromise, Berlin signed off on a longer maturity extension but managed to limit the tranche of bailout money.
“The deal is good news for Greece and on the optimistic side of what was expected,” said Athanasios Vamvakidis, a strategist at Bank of America Merrill Lynch in London. “Greece buys more time and the debt becomes sustainable, at least on paper. The deal also includes a clear post-program monitoring framework to make sure Greece sticks to the targets. Markets are reassured for now. But it is up to Greece to succeed. Growth is the key.”