Eurozone reaches deal on Greek bailout funds, debt

Eurozone finance ministers reached a vital deal with Greece after marathon talks Wednesday to unlock 10.3 billion euros ($12 billion) in bailout cash and start debt relief for Athens as demanded by the IMF.

The 19 ministers from the countries that use the euro met in Brussels two days after Greek lawmakers passed yet another round of spending cuts and tax hikes demanded in return for rescue loans.

"This is an important moment in the long Greek programme, an important moment for all of us, since last summer when we had a major crisis of confidence between us," Eurogroup chief Jeroen Dijsselbloem said after the late night talks.

He said the ministers had agreed to unlock the 10.3 billion euros -- the windfall for completing the first formal review of its 86 billion euro bailout programme agreed last July.

With Greece needing the money to honour two huge debt payments to the European Central Bank, Dijsselbloem said Greece's creditors would pay a first 7.5 billion tranche in June and a second 2.5 billion in September.

But crucially for keeping an increasingly sceptical International Monetary Fund on board, Djissebloem said the ministers had also agreed to phase in debt relief for cash-strapped Athens.

"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.

He added that he was "glad to confirm" the IMF 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.

The IMF believes that Greek public debt at the current level of about 180 percent of gross domestic product is unsustainable and must be reduced.

The IMF darkly added in a report on Monday that without restructuring the debt load could soar to as much as 250 percent of output by 2060.