IMF: Greece still needs debt relief

Following the eurozone announcement, International Monetary Fund (IMF) chief Christine Lagarde, who had joined in the finance ministers' discussions by conference call on Friday, released a statement calling for some form of debt relief for Greece. Several of Greece's creditors oppose such a move, yet see the Washington-based IMF as having a key role in providing further support for Greece.

"I remain firmly of the view that Greece's debt has become unsustainable and that Greece cannot restore debt sustainability solely through actions on its own," Lagarde said.

"It is equally critical for medium and long-term debt sustainability that Greece's European partners make concrete commitments… to provide significant debt relief, well beyond what has been considered so far," Lagarde added.

The eurogroup had opposed any "haircut" or trimming of the debt but was open to other options including extending the repayment timeline, which would have a similar effect, if Greece was found to have met its loan conditions in a review scheduled for October.

German Finance Minister Wolfgang Schäuble, who has become the face of austerity demands by Greece's creditors, took a "wait and see" approach with regards to the agreement reached following months of fraught negotiations.

"This is an opportunity. But what is decisive is that Greece does what it says it will do," Schäuble said.

New agreement

Following six hours of talks in Brussels on Friday, eurozone finance ministers agreed Friday to lend Greece a further 86 billion euros ($96 billion), to be released in stages. Greek lawmakers had accepted a reform package - containing many of the austerity elements voters had rejected in a July referendum – following a lengthy debate in parliament. The agreement is awaiting approval by several parliaments of eurozone countries, among them Germany. If those parliaments agree, which it is expected they will, 13 billion euros should be in Athens next Thursday and a further 10 billion will be set aside at the European Stability Mechanism.

"Together, we have looked into the abyss. But today, I am glad to say that all sides have respected their commitments. Greece is living up to its ambitious reform commitments," European Commission head Jean-Claude Juncker said in a statement Friday.

The Greek Finance Minister Euclid Tsakalotos said it was now up to his fellow Greeks to forge ahead.

"Let's hope the Greek people will be able to make the best of this deal, to make the best of the reforms and the ability to reform and mitigate any negative consequences that surely exist," he said.

se/bw (AFP, AP, dpa, Reuters)