The eurozone finance ministers agreed to unlock €10.3bn in new loans after marathon late-night talks in Brussels, the BBC wrote.
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Greece’s debt is predicted to reach more than 333 billion euros ($379 billion) this year, around 180 percent of its annual economic output.
“On the package of reforms Greece had committed to last summer, we now have full agreement”, said Jeroen Dijsselbloem, the Dutch finance minister who is president of the Eurogroup.
“The Eurogroup agreed today on a package of debt measures which will be phased in progressively”, said Dijsselbloem, who is also the Dutch finance minister, adding he was “glad to confirm” the International Monetary Fund would now stay on board.
“This agreement is act of confidence in today’s Greece”, French Finance Minister Michel Sapin said.
Germany’s Finance Minister Wolfgang Schauble chats with Eurogroup President Jeroen Dijsselbloem and Luxembourg’s Finance Minister Pierre Gramegna during a Euro zone finance ministers meeting, to discuss whether Greece has passed sufficient reforms to unblock new loans and how worldwide lenders might grant Athens debt relief, in Brussels, Belgium, May 24, 2016.
Spokesman Poul M Thomsen said: “We welcome that it is recognised that Greece needs debt relief to make that debt sustainable and it can’t do it on its own”.
The deal was announced after 11 hours of talks between the 19 eurozone ministers – known as the Eurogroup.
“We had argued that these debt-relief measures should be approved up front and we have agreed that they will be approved at the end of the program”, added Thomsen.
The creditors have already granted Greece two bailout loans – one in 2010 and the other in 2012 – worth a total of €240 billion ($272 billion).
The easing of Greece’s debts could be achieved by various methods, including extending some repayment maturities, the euro zone agreed – not through a “haircut” reducing the amount of nominal debt.
He added that he was “glad to confirm” the International Monetary Fund would now recommend to its governing board that it stay on the Greek bailout programme, having earlier expressed concerns that it would collapse without debt relief.
As part of its debt relief measures, Greece will receive a short-term re-profiling of its loans, while more expensive debt could be “swapped” with cheaper loans to bring down the country’s overall financing costs.
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“This opens the way for a return of confidence that is so essential for lasting economic recovery in Greece, which is our common goal”, said Moscovici.
