Greek Financial Markets Rally on Debt Relief Deal

After €300 billion in aid, Greece will exit its bailout on shaky ground

In addition, he said, a ten-year extension was granted for the repayment of EFSF loans, with a ten-year grace period.

They also agreed to disburse 15 billion euros ($17.5 billion) to ease Greece's exit from its rescue program.

"A new chapter is opening for the country, but that does not mean that we should abandon the prudent path of fiscal balance and structural reforms our country needs", Tsipras said in statements broadcast live on Greek public broadcaster ERT.

The agreement is an important turning point for the eurozone almost a decade after Greece stunned the world with out-of-control spending and sparked three bailouts and a near collapse of the euro single currency.

The European Union and other worldwide creditors have provided the country with 270 billion euros, or 320 billion dollars, in financial support since 2010 in return for stringent budget austerity programs.

"We commend Greece and its European partners on the completion of the fourth and final review under the European Stability Mechanism (ESM) program".

The deal was expected to be an easy one, but last-minute resistance by Germany - Greece's biggest creditor - on debt relief dragged the talks on for six hours.

Greece will also receive an additional €15 billion on repayment of some more-expensive International Monetary Fund loans, as well as to create a cash buffer so that it could meet financing needs in the next two years.

The additional debt relief measures announced today will mitigate Greece's medium-term refinancing risks and improve its medium-term debt prospects, both of which are very welcome results.

Opposite the hardliners were France and the European Central Bank, which argued that reduced debt was crucial in order for Greece to gain the trust of the markets.

"The Greek crisis ends here tonight", said EU Economic Affairs Commissioner Pierre Moscovici, after the marathon talks in Luxembourg.

However, the key part of the agreement are the relief measures that should allow the Greek debt, which is close to 180 per cent of GDP, to be sustainable and the markets to regain confidence in Athens' ability to honour their commitments.

"But we should collectively find a way to alleviate the debt, either by extending the maturities of existing loans or by buying back the most expensive ones", he said. Although the Fund's own Stand-By Arrangement can no longer be activated, the IMF confirmed its continued involvement in Greece in the post-program surveillance framework alongside the European Institutions.

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