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Greece’s international creditors have hailed progress on the reforms demanded of the country, saying the “big blocks” to releasing bailout cash to Athens had been cleared.

Speaking after an informal meeting of finance ministers in Malta, Jeroen Dijsselbloem confirmed a deal had been struck on the reforms demanded of the left-wing government in return for its latest tranche of rescue cash.

The breakthrough will allow bailout teams to return to Athens in order to complete the country’s second bailout review.

Creditors have agreed Greece will carry out reforms worth 2 per cent of its GDP over the following years. Within this, 1 per cent will fall in 2019 mainly from pension changes and 1 per cent in tax reforms in the following year.

“We have an agreement on these overarching elements of policy in terms of size timing and sequencing and reforms,” the Eurogrop chief told reporters.

A staff level agreement should be agreed “as soon as possible” said Mr Dijsselbloem, after which creditors will discuss key issues such as debt relief measures which have been demanded by the International Monetary Fund.

“The big blocks have now been sorted out and that should allow us to go to the final stretch”, said the Dutch finance minister.

Greece’s finance minister Euclid Tsakalotos said the reforms would be coupled with “countermeasures” if Greece meets its budget targets, allowing Athens to alleviate measures such as child poverty and housing from 2019.

“The restrictive measures will be legislated in the coming weeks and will be implemented. Positive measures will also be legislated and implemented if we are within the targets” said Mr Tsakalotos.

Also attending the meeting, Benoit Coeuré of the European Central Bank said the institution would start “concrete discussions” over carrying out a new assessment of Greece’s debt sustainability.

This assessment is the first step in any ECB decision to include Greece in its two-year stimulus measures – a key demand from Syriza to help relieve pressure on its shrinking economy.

Copyright The Financial Times Limited 2017. All rights reserved.
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