|
 Finance ministers sealed the decision in a telephone conference
convened by Eurogroup chairman Jeroen Dijsselbloem after the new
leftist-led Athens government sent him a detailed list of reforms it
plans to implement by the end of June.
The respite, to be ratified by some national parliaments in the
coming days, averted an imminent banking meltdown and a potential
state bankruptcy for now, but tough negotiations lie ahead soon over
the country's longer-term economic future.
A Greek finance ministry official said the euro zone's most heavily
indebted nation would start discussions immediately with its EU and
IMF partners on meeting this year's financing shortfall.
"The discussions on Greece's funding gap will begin tonight,
tomorrow morning," the official said, speaking on condition of
anonymity. Options included allowing Athens to issue more short-term
t-bills and using ECB profits on Greek bonds, he said.
As required by the creditors, Marxist Finance Minister Yanis
Varoufakis had sent Brussels a six-page document late on Monday that
watered down campaign promises to end privatizations, boost welfare
spending and raise the minimum wage, vowing to consult partners
before key reforms and to keep them budget-neutral.
In a statement, the 19-nation Eurogroup urged Greece to develop and
broaden the list of reform measures, based on "the current
arrangement" -- a euphemism for the bailout agreement which leftist
Prime Minister Alexis Tsipras had vowed to scrap.
IMF Managing Director Christine Lagarde said the reform plan was
"not very specific", and much clearer assurances would be needed on
key reforms of pensions, taxation and privatization.
ECB President Mario Draghi gave the list a guarded welcome and said
he would keep a close watch on ideas that depart from previous
pledges. He warned the radical new government in coded central
banker language against plans to help Greeks walk away from their
private tax and mortgage debts.
"I would also again urge the Greek authorities to act swiftly to
stabilize the payment culture and refrain from any unilateral action
to the contrary," Draghi wrote.
Financial markets surged even before confirmation of the extension
of the 240 billion euro EU/IMF bailout, saving Greece from a
potential disorderly exit from the euro zone.
However, Dijsselbloem told the European Parliament the euro zone's
most heavily indebted member was likely to need further assistance
after two bailouts since 2010.
MARKETS RALLY
The Greek letter pledged not to reverse ongoing or completed
privatizations, and to ensure that the fight against what the
government calls the humanitarian crisis caused by bailout-driven
austerity "has no negative fiscal effects".
The document, seen by Reuters, contained few figures but promised to
improve tax enforcement, fight corruption and "review and control
spending in every area of government spending". Dijsselbloem said
Athens may be too optimistic about how much revenue the planned tax
crackdown would generate.
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Greek financial markets, which reopened for the first time since
Friday's outline deal between Varoufakis and euro zone finance
ministers, rallied strongly on relief that a meltdown had been
averted for now.
Government bond yields dropped by three percentage points and stocks
hit a 2-1/2 month high due even though the country's longer-term
survival in the single currency remains uncertain.
Dijsselbloem, who is also Dutch finance minister, told EU lawmakers
the euro zone could consider further debt relief if Athens met all
the criteria specified in its November 2012 second bailout, "which
hasn't happened yet".
He insisted a Greek exit from the euro zone had not been discussed
and was not on the table, adding that the only government to have
held a meeting to prepare for a possible "Grexit" was in non-euro
Britain.
The ECB, which has been keeping Greek banks afloat with emergency
liquidity assistance as deposits have flooded out, did not say when
it might allow them to resume normal central bank funding using
Greek government bonds as collateral.
In EU paymaster Germany, Finance Minister Wolfgang Schaeuble, who
took the toughest line in the Greek negotiations, wrote to the
speaker of the lower house of parliament requesting a vote this week
on extending the bailout.
Germany's rejection of an initial Greek request for a six-month loan
extension forced Athens into a string of politically sensitive
concessions, postponing or backing away from campaign promises to
reverse austerity, scrap the bailout and end cooperation with the
"troika" of EU, ECB and IMF inspectors.
The letter said Greece would phase in collective bargaining with a
view to raising minimum wages "over time" but promised that any
changes would be agreed with its partners.
While Tsipras has won broad support in his coalition for the deal
clinched in Brussels, some hardline leftists have criticized it and
the conservative opposition has charged that his illusions have been
punctured.
On Saturday, Tsipras called the tentative accord a victory for
Greece, but participants said Athens was isolated in the talks and
forced to make humiliating concessions because its banks were
running out of cash.
(Additional reporting by Deepa Babington in Athens, Adrian Croft in
Brussels, Erik Kirschbaum in Berlin, John Geddie in London and Aija
Krutaine in Riga; Writing by Paul Taylor; editing by Anna Willard
and Giles Elgood)
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