EU grants Greece extra cash, Athens pledges reforms

European Commission President Jean-Claude Juncker (pictured above) announced on Friday that the EU would make two billion euros ($2.15 billion) of unused development funds available to Greece's new government, led by the anti-austerity Syriza party of Prime Minister Alexis Tsipras.

Speaking to reporters in Brussels, Juncker stressed that strict conditions were attached to the additional funds.

"This will not be used to fill Greece's coffers, but to support efforts to create growth and social cohesion in Greece," said Juncker, adding that one of the main aims of granting the funds was to reduce youth unemployment in the country.

Urgent talks

The announcement followed a meeting on the fringes of the EU summit late on Thursday, involving both Tsipras and Juncker, as well as German Chancellor Angela Merkel, French President Francois Hollande, the president of the European Central Bank, Mario Draghi, European Council President Donald Tusk and Jeroen Dijsselbloem, the head of the Eurogroup of nations which use the euro currency.

Following the meeting, Tusk, Juncker and Dijsselbloem issued a joint statement in which they said all of the parties had agreed to adhere to a previous deal, under which Greece's creditors would extend the country's 240-billion-euro bailout by four months in exchange for Athens implementing reforms meant to reduce its debt. It also said Tsipras had pledged that Greece "will present a full list of specific reforms in the next days."

Later, Tsipras, who has described the situation in his country as a "humanitarian crisis," appeared triumphant, saying that it was "clear that Greece is not obliged to implement reactionary measures." However, he was unable to convince Brussels to pay out the final seven-billion-euro tranche of its bailout prior to implementing the agreed reforms.

'Every paragraph counts'

Speaking at a press conference at the end of the two-day EU summit, Chancellor Merkel stressed the need for Greece to fully comply with the February deal.

"Every paragraph of the agreement counts," she said.

At the same time though, she conceded that Athens would have the option of revoking some existing economic reforms and replacing them with new ones if they achieved the same effect.

"The institutions and then the Eurogroup must decide whether they have the same effect," Merkel said.

Berlin and Athens have been at loggerheads since Greece's left-wing-led government was elected in January on a promise to roll back austerity measures taken by the previous conservative government to comply with bailout conditions set by international creditors.

German Foreign Minister Frank-Walter Steinmeier is to host his Greek counterpart, Nikos Kotzias, in Berlin on Sunday, in a bid to smooth over the frayed ties. One day later, Tsipras is also due in Berlin for talks with Chancellor Merkel.

pfd/sb (Reuters, dpa, AFP)