Greece is set to get its next tranche of bailout money, worth an estimated €130 billion, after eurozone leaders announced an agreement with the Greek government.
The move came after the Greek government announced a further €325m in reduced spending and private lenders took a 53.5 per cent haircut.
Eurozone leaders say they had been assured of the implementation of the programme by coalition leaders beyond forthcoming general elections.
The news will see a provision ensuring the priority of debt servicing included in the Greek constitution.
In a statement the leaders say: “The Eurogroup is fully aware of the significant efforts already made by the Greek citizens but also underlines that further major efforts by the Greek society are needed to return the economy to a sustainable growth path.”
The statement also argued for the European Commission’s Greece task force to be bolstered.
Christine Lagarde, managing director of the International Monetary Fund (IMF), welcomed news of the agreeement.
She adds: “As soon as the prior actions agreed with the Greek authorities are implemented and adequate financial contribution from the private sector is secured, I intend to make a recommendation to our executive board regarding IMF financing to support a program.
“I also welcome today’s discussion on ensuring the adequacy of the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM), which will help bolster the firewall against financial contagion, catalyze efforts to enhance IMF resources, and help secure global stability for the benefit of all.”