After weeks of negotiations, the eurogroup, the association of eurozone finance ministers, and the International Monetary Fund have reached a deal to continue providing aid to Greece, the two organizations announced in separate statements.
The participants agreed that the country's debt should be reduced to below 124% of GDP by 2020, and under 110% by 2022. Greece will be provided with up to 43.7 billion euros ($57 billion) from European institutions in order to help in this effort. The monies will be paid in several installments, provided the Greek government meets certain conditions for the release of each.
The earliest of these should come through in the first half of December. This tranche is seen as critical, since the government is short of funds to pay salaries for public-sector workers, pensions, and payments to suppliers next month. Additionally, it requires funding to recapitalize the country's struggling banks.
This attempt to drive down the deficit will be aided by a package of measures, including a reduction of interest rates and a lengthening of maturities for existing bailout loans to the country, and interest repayment deferrals.
"Taken together, these measures will help to bring back Greece's debt ratio to a sustainable path and facilitate a gradual return to market financing," IMF Managing Director Christine Lagarde was quoted as saying in her organization's statement.
At the moment, Greece's public debt is over 170% of GDP, a figure that could approach 200% within the next two years, according to some estimates.