Eurozone agrees on €10 billion Greek debt deal

After late-night talks that lasted 11 hours in Brussels, the 19 eurozone ministers, known as the Eurogroup, agreed to unlock €10.3 billion in new loans.

The move came two days after the Greek parliament approved another round of spending cuts and tax increases demanded by international creditors.

The ministers also said debt relief would be eventually offered to Greece.

This had been a key demand from the International Monetary Fund (IMF), which has been at odds with the Eurogroup for months over the issue of reducing Greece's debt, as the former said Greece’s public debt is unsustainable at current levels of about 180% of its gross domestic product.

"We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme," Eurogroup president Jeroen Dijsselbloem told reporters early on Wednesday.

He said a package of debt measures would be "phased in progressively”.

Poul M Thomsen, director of the IMF's European Department, welcomed the recognition that Greek debt was unsustainable and relief was needed. However, he warned that the IMF board in Washington still had to agree to the fund's participation and that the extent of debt relief was still not clear.

The new bill passed by the Greek government also created a state privatisation fund requested by eurozone finance ministers.

The government, led by the leftist Syriza coalition, agreed to a third bailout worth €86 billion last year.