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Saturday 30 August 2014

Greece makes deal on bailout loans

Published 18/03/2014 | 13:02

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Greece's prime minister Antonis Samaras arrives to make a statement to the media at the Finance Ministry (AP)

Greece says it has reached an agreement with its international debt inspectors that will allow the release of a long-delayed rescue loan instalment.

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Prime Minister Antonis Samaras said the agreement does not include a requirement for any new austerity measures.

Finance Minister Yannis Stournaras said the text of the deal was being written up.

The agreement comes after six months of often stalled talks with officials from the International Monetary Fund, European Central Bank and European Commission.

Negotiations had snagged on several issues, including public sector firings and market reforms.

Greece has been dependent on its bailout from other European countries and the IMF since mid-2010. Payment of the rescue loans depends on the country meeting criteria in spending cuts, tax increases and reforms.

Mr Samaras said some 500 million euro (£419 million) will be distributed to help more than a million needy Greeks.

"Today a long period of tribulations has ended, and a new beginning is being made," he said. "These were seven very, very difficult months."

Apart from the 500 million euro that would be distributed to Greece's poorest, Mr Samaras said an additional billion euro (£838 million) would go toward paying off the state's internal debts - for goods and services received from the Greek private sector.

That will raise to 2.8 billion euro (£2.3 billion) the amount it will pay off in internal debts in 2014.

Other measures included cuts in social security contributions for both employers and employees to encourage hiring and reduce labour costs. Greece's unemployment rate stands at 27.5%, the highest in the European Union.

The prime minister also said 20 million euro (£16.7 million) would be given to services that care for the homeless.

"Of course, the effort continues," Mr Samaras said. "We will become a modern European economy. A new Greece."

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