ATHENS, Greece (AP) - Greece’s bailout creditors on Friday backed a payout worth more than $1 billion as part of a debt-relief package that is contingent on the government enacting a series of reforms.
Mario Centeno, who heads the grouping of the eurozone’s 19 finance ministers, told reporters after a meeting in Bucharest, Romania, that the debt-relief measures were worth some 970 million euros ($1.1 billion) and came mostly from the profits of Greek government bonds held by eurozone central banks.
The payout, Centeno said, would be subject to formal approval by the euro area’s bailout fund.
Greece is keen to qualify for debt relief after years of recession and three successive international bailouts left its national debt at around 180% of the country’s annual income. Even though its bailout program ended last August, Greece remains under tight supervision from creditors.
The Greek government has pushed through reforms including the speeding-up of privatization projects and easing pressure on Greek banks from loans-gone-bad.
Centeno said the payout “sends investors a positive signal of continued ownership of the reform agenda in Greece, and you can see this already going on in the markets today.”
Shares on the Athens Stock Exchange were up 1.2% in afternoon, with the advance led by a strong performance by the country’s four main banks. The yield on Greece’s 10-year bond also dropped further to 3.5 percent, half the level that is widely considered unsustainable in financial markets.
The stocks rally was also helped by cautious backing by lenders for Athens’ bid to make an early repayment of its bailout loans to the International Monetary Fund, which carry a relatively interest rate.
Prime Minister Alexis Tsipras’ left-wing government in Greece is facing elections this year but is trailing the conservatives in opinion polls and struggling to continue with cost-cutting reforms demanded by creditors.
Friday’s payout-approval hinged on details of a household insolvency law that eased protection of distressed mortgage holders from foreclosure.
Lenders are pressing Athens to take more aggressive action to reduce the huge volume of nonperforming and soured loans that reached nearly half the total last year.
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Casert contributed from Brussels. Follow Gatopoulos http://www.twitter.com/dgatopoulos and Casert at http://twitter.com/rcasert
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