Short-term debt relief awarded to Greece

BRUSSELS (AP) — Greece won some shortterm debt relief from European creditors on Monday even though it failed to clear the latest hurdle in its bailout program that has prevented the country going bankrupt and crashing out of the euro.

At a meeting of the 19 eurozone finance ministers in Brussels that was largely overshadowed by the Italian referendum result that forced Premier Matteo Renzi to offer his resignation, Greece’s creditors offered some immediate help to the cash-strapped Greek government.

Among the measures offered were a smoothing of some of Greece’s repayment profile in order to prevent debt repayment humps on the way and a waiving of an interest rate increase that was due to take effect next year.

The measures have been seized upon by the Greece’s left-wing government, which has been losing support according to opinion polls, as evidence that it’s getting something in return for all the tough economic medicine that it’s been making the country take.

“The eurogroup decision for the immediate implementation of short-term measures for the adjustment of Greek debt represents a considerable success and another decisive step for the Greek economy toward exiting the crisis,” said Greek Prime Minister Alexis Tsipras.

In return for successfully enacting a wide-ranging package of economic reforms and budgetary restraints, Greece’s creditors have promised to offer some debt relief measures for both the short and long term.

“They are much more ambitious measures than we expected in May or hoped for, so that’s very promising,” said Greek Finance Minister Euclid Tsakalotos. “This will start helping the Greek economy all at once.”

According to Klaus Regling, the head of the European Stability Mechanism, the body that releases the bailout funds to Greece, Monday’s package of measures will reduce Greece’s debt burden by around 20 percentage points by 2060. Tsipras said the reduction could amount to some 45 billion euros.

Though conceding there’s a large amount of uncertainty around that prediction given the timescale involved, Regling said the benefits to Greece were “clear” and would help make Greek debt sustainable.