Eurozone preparing "exit strategy" from Greek bailouts in 2018

IMF says it is moving to approve a 'stand-by arrangement' for the country

Eurozone preparing "exit strategy" from Greek bailouts in 2018

Image via @IMFNews on Twitter

Eurogroup President Jeroen Dijsselbloem says finance ministers are preparing an "exit strategy" for Greece from its bailout programme.

He says this is a major step forward, as there is agreement on all elements of the latest bailout.

The country is now going into the last year of its financial support programme.

Mr Dijsselbloem says the exit strategy will "enable Greece to stand on its own feet again next year".

He has also commended institutions, Greek authorities and the Greek people for their "intense efforts and resolve".

The Eurogroup has welcomed reforms adopted by Greece's parliament - covering areas such as pensions, income tax, the labour market as well as the financial and energy sectors.

Greece has also commited to maintain a primary surplus of 3.5% of GDP until 2022.

The Eurogroup says it should be able to proceed with the next tranche of loans to Greece, after Eurozone states complete national procedures authorising it.

Some €8.5bn would be unlocked for Athens. This would be the third bailout for Greece since the sovereign debt crisis started in 2010.

IMF arrangement

The head of the International Monetary Fund (IMF) also says the organisation is moving to approve a new stand-by arrangement for Greece.

Speaking in Luxembourg, Christine Lagarde said: "I would like to announce my intention to propose to the IMF's Executive Board the approval in principle (AIP) of a new IMF Stand-By Arrangement for Greece.

"We have recently seen significant progress by the Greek government on policy reforms, with a staff-level agreement followed by supportive legislation from the Greek Parliament.

"We have also seen progress on debt relief, although further discussions are needed on the scope and type of measures to be provided by Greece's European creditors."

AIP is a procedure where there has been agreement on the policies that would underlie an IMF-supported program, but where full agreement between the member and its creditors has not yet been reached on new financing or debt relief.

AIP allows additional time for such an agreement to be reached.

Ms Lagarde added: "In the case of Greece, AIP would allow the IMF to be supportive of the progress made on policies, while release of resources under the IMF arrangement would be conditional upon Greece's European creditors providing commitments for debt relief sufficient to secure debt sustainability."

Ireland's newly-appointed Finance Minister Paschal Donohoe also attended the talks in Luxembourg.