ATHENS, Greece -- European and global financial leaders have agreed to release (EURO)44 billion ($57 billion) in critical loans to Greece and provide billions in additional debt relief in order to help the country stabilize its ailing economy.
After three weeks of negotiations, Greece's euro partners and the International Monetary Fund agreed early Tuesday morning to release the loans in four installments beginning next month. The leaders also settled on a raft of measures -- including a debt buyback program and an interest rate cut on loans -- that will reduce the country's debts by about (EURO)40 billion.
Greek Prime Minister Antonis Samaras hailed the agreement in Brussels as a victory. "Yesterday, a very grey, a very dark time for Greece ended definitively," he said in a televised address to the nation, adding that the agreement "managed to ensure us remaining in the euro."
The eurogroup and IMF agreed to release in December (EURO)34.4 billion in loans originally scheduled for June. The remainder will be issued in three installments in the first quarter of 2013. The money will be used to help recapitalize Greece's struggling banking industry and pay back suppliers, including its pharmacists which have gone for months without any payment from the Greek state welfare system.
Greek Finance Minister Yannis Stournaras said the deal was "very important for it keeps Greece in the euro, offers it a significant opportunity to exit the vicious cycle of recession and over-indebtedness, and contributes to its debt reduction."
But Germany's finance minister, Wolfgang Schaeuble, warned that Greece still has to stick to its side of the bargain for the bailout loans and debt relief to work.
"We can do what we want, from the IMF to the eurogroup, if Greece itself doesn't implement the necessary, difficult reforms and adjustment measures step by step, then it's a mission impossible," he told reporters in Berlin.