About €10.3bn (£7.83 bn) in bailout money was promised for Greece as the International Monetary Fund had lowered its demand for up-front debt relief for Greece.
However, according to IMF European Programme Director Poul Thomsen, the debt relief plan was a “far cry” from the “upfront and unconditional” debt relief. Thomsen said the IMF made “a major concession”.
He said “We had argued that [debt relief measures] should be approved up front and [now] we have agreed that they should be made at the end of the programme period.”
Germany’s reluctance to make concessions was the root cause of the conditional debt relief for Greece. Political analysts believe Germany’s actions is due to the upcoming federal elections in October 2017, where the current government may antagonise their voters.
Greece earlier agreed on contingency measures. It had implemented more spending cuts and tax increases equivalent to €3.6bn (£2.75bn), which would grow stronger once it meets its targets as indicated in the conditions.
Greek Finance Minister Euclid Tsakalotos said he saw “optimism” to finally “reverse Greece’s vicious circle of recession-measures-recession into where investors have a clear runway to invest.”
France’s Finance Minister Michel Sapin said: “Greece needs room to breathe, it needs certainty. It has made considerable efforts, which again we have seen this weekend in adopting a difficult package of measures.” Even fiscal hawks, such as Slovakia’s Peter Kažimír, agreed it was important to agree the next bailout tranche “because we don’t need another liquidity crisis.”