However, any debt relief agreed by Eurozone’s 19 finance ministers would not result in a cut to the amount of money Greece owes.
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As the talks dragged into the night, sources said the cash could be split in two tranches of 7.5 billion euros in June and 2.8 billion euros in September, to ensure Greek authorities follow through with their reforms.
“I think there is some ground for optimism that this can be the beginning of turning Greece’s vicious circle of recession-measures-recession into one where investors have a clear runway to invest in Greece”, Greek finance minister, Euclid Tsakalotos, told reporters as he left the Brussels meeting, according to Reuters.
German Finance Minister Wolfgang Schaeuble agreed that he was “confident” for a deal in principle at Tuesday’s talks on the payout with only a few details to be worked out in the coming days. The government has also created a privatisation fund to sell off state assets, in effect security for the loans.
Eurogroup head Jeroen Dijsselbloem earlier hailed Greece’s “important work since the summer and in the past weeks” to deliver on the reforms.
The next step for creditors would be to find a way to lighten the country’s debt load, which mainly consists of past rescue loans from eurozone states.
Germany, the eurozone’s economic powerhouse, is deeply opposed to alleviating any of Athens’ debt and claims it is not necessary for now.
“The Eurogroup agreed today on a package of debt measures which will be phased in progressively, as necessary to meet the agreed benchmark on gross financing needs”, a statement said.
In a report on the eve of the Eurogroup meeting, the International Monetary Fund had warned that Greek public debt at the current level of about 180 percent of gross domestic product was unsustainable and must be reduced.
“This opens the way for a return of confidence that is so essential for lasting economic recovery in Greece, which is our common objective”, said Moscovici.
Dijsselbloem added that confidence between the International Monetary Fund and euro zone and Greece had started to recover.
Greece’s parliament passed a bill over the weekend on a series of measures that creditors had demanded.
The most likely outcome is another compromise deal, which sees the funds released and immediate market relief, but the differences between the Eurogroup and IMF will not be resolved and the underlying crisis will continue to fester.
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“An actual haircut of the loans will not happen”, Dijsselboem said.
