Debt campaigners criticise IMF over Greek deal - as it happened

Greece's creditors have finally agreed to unlock billions of bailout loans, but Jubilee Debt Campaign says IMF has backed down

• Moody's says deal is credit positive
• Jubilee Debt Campaign blast IMF
• But eurogroup chief hails deal
• Greek bonds are rallying
• Analyst: Deal could be tricky for Tsipras
• As it happened: Finally, a deal....

6.13pm BST

News of the Greek debt deal has seen stock markets record some good gains - apart ironically from in Athens - while Greek bond yields have fallen sharply.

Germany's Dax added 1.47%, France's Cac closed 1.13% higher, while Italy's FTSE MIB rose 1.66% and Spain's Ibex ended 2.32% higher.

5.15pm BST

After Moody's saying the Greek deal was credit positive, Fitch has also welcomed the late night agreement but warned of possible problems implementing reform measures. The ratings agency said:

The agreement reached between Greece and its eurozone creditors reduces the risk of another Greek liquidity crisis this summer, and incentivises the country to complete its third bail-out programme. However, with little debt relief offered upfront, the Greek government may find it progressively more difficult to continue with politically controversial measures required to meet ambitious programme commitments. Implementation risk therefore remains high.

The agreement highlights the improved relations between Greece and its official creditors since last summer's often confrontational negotiations leading up to the current ESM programme. The Greek government has implemented prior actions, including pension reform and a contentious requirement for additional fiscal contingency measures to safeguard the 2018 budget target.

5.07pm BST

The Eurogroup "breakthrough" on debt relief was no such thing, says Joan Hoey, Greek analyst at the Economist Intelligence Unit:

The coveted debt relief upon which the [Greek] prime minister has been banking, to provide a political fig leaf for his acceptance of another bailout, remains out of reach, contingent and unquantified.

The Eurogroup did not finalise the long-delayed first review of the bailout programme. It looked at the reforms passed so far and found them wanting. It concluded that several conditions "prior reforms" will have to be met before any money can be handed over.

4.26pm BST

And now some comments emerging from the IMF:

*IMF OFFICIAL: NEED MORE CONCRETE DEBT-RELIEF DETAILS ON GREECE

*IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL

#IMF NOT ENDORSING GREEK DEAL UNTIL BOARD APPROVES - IMF SHOULD BE ABLE TO CONSIDER GREEK LOAN BY YEAR-END: OFFICIAL

4.17pm BST

Here's a timeline of Greece's incoming bailout funds and outgoing payments in the next few months:

4.12pm BST

European markets are holding onto their gains as they head to the close. Jasper Lawler, market analyst at CMC Markets, said:

Stocks extended gains on Wednesday as a tentative agreement on Greek debt relief and a fresh seven-month high in the price of US oil offered more cause for optimism. Banks were top risers for a second day as markets price-in the earnings benefit of a possible US rate rise in the summer. Banks in the peripheral of Europe most exposed to Greek debt, including Spain's Banco Santander, were top performers.

Less exposure to Greece and weak earnings from M&S weighed on the FTSE 100, which rose less than its European counterparts.

4.09pm BST

The funds to be released following the late night Eurogroup agreement should last Greece until the end of October when the second review of the bailout programme is due start, according to the Athens-Macedonian News Agency. It says:

The a10.3bn tranche that the Eurogroup decided to disburse to Greece will fully meet the country's financing needs until the end of October, when the second review of the Greek programme is set to start, Eurozone officials said on Wednesday.

Describing the events behind the scenes at Tuesday's Eurogroup, the sources said that the IMF and Europeans had reached a compromise in spite of their different initial positions, while confirming that the IMF will participate. According to one EU official, this was not so much a "power play" but more that all sides moved from their initial position, with the IMF fully understanding that the Eurozone operates in a different way from the fund.

Regarding the measures for the debt, the European sources said that there were no "immediate decisions" but this was not a surprise, since there were no debts maturing in the short term. In the medium-term, the Eurozone countries said they will examine the possibility of buying up debt to the IMF early, or the bilateral loans with Eurozone countries, using the unspent funds (approximately 20 billion euros) originally destined for the recapitalisation of the banks. This would, however, require the approval of some national parliaments.

According to Eurozone officials, the chances that Greece can return to borrowing from the markets at reasonable interest rates at the end of the programme are much higher following the agreement at Tuesday's Eurogroup. They said that Greece's access to the markets can begin to be restored gradually, in the second half of 2017, and that the aim is to restore full market access by the end of 2018.

3.54pm BST

In Greece trade unionists are already flexing their muscles and planning mass industrial action, reports Helena Smith.

Strikes are expected to start tomorrow when workers at the Piraeus Port Organisation and Thessaloniki Port Organisation begin a 48-hour walk-out in opposition to the controversial privatisation programme the government has signed up to.

Adedy, which represents employees in the public sector, has also decided to hold a Pan-Hellenic work stoppage on June 8. "We decided, today, after meeting health and education federations that we would take this action to protest all the things that these new measures mean: lack of staff, underfunding, appointments that should, but will never happen," Adedy's chief policy maker, Grigoris Kalomoiris told the Guardian.

"The Eurogroup was a fiasco for Greece. The government was just a spectator while Germany rode roughshod over everyone else and made all the decisions. To conclude the review we agreed to sell off all our public wealth and impose more of the same counter-productive measures. It makes no sense. Come September/October we foresee mass and dynamic reaction because it is then that the measures will start to kick in."

Kalomoiros said the trade union now firmly believed the only way out for the debt-stricken country was to leave the eurozone.

3.10pm BST

Back with German finance minister Wolfgang Schiuble. According to Bloomberg he has said a fourth Greek bailout programme is not needed as of now.

2.55pm BST

As expected, US markets have followed their counterparts elsewhere and moved higher in early trading, partly buoyed by the Greek agreement overnight and continuing strength in the oil price.

The Dow Jones Industrial Average is currently up 124 points or 0.7% while the S&P 500 opened up 0.28% and Nasdaq 0.34% better.

[BREAKING] US Markit Services PMI May P: 51.2 (est 53; prev 52.8)
-Composite PMI May P: 50.8 (prev 52.4)

Markit Flash U.S. Composite #PMI Output Index falls from 52.4 in April to 50.8 in May https://t.co/6Wwc4mI64S pic.twitter.com/aSKC3cAXNw

US business optimism lowest since 2009 according to Markit services flash PMI respondents pic.twitter.com/vpgff4wLNy

2.46pm BST

Schiuble also said there were no major changes to the Greek bailout programme, according to Reuters, so there was no need for German parliamentary approval.

#Germany finance minister #Schaeuble 'asumes' @HiBTag Budget Committee would back #Greece deal

2.29pm BST

German finance minister Wolfgang Schiuble has said last night's result on Greece was a good one, and the next tranche of aid can now be paid out. But it looks like it's not all sweetness and light with the IMF:

"It wld have been helpful if the (IMF) managing director had been present.That wld have saved us a few hours,"Schaeuble says of Greek talks.

2.02pm BST

Here's a link to the transcript of the comments by Klaus Regling, head of the European Stability Mechanism, after last night's Eurogroup meeting:

Transcript of #ESM MD Klaus #Regling at #Eurogroup press conference https://t.co/fxmZ3XaHLs pic.twitter.com/CDOzoiGkoA

1.51pm BST

Markets continue to be buoyed by the early morning Greek deal, although are now off their best levels.

Banks are among the main movers, both on the Eurogroup agreement and because a rise in US interest rates, which could come as early as June or July, is likely to bolster their balance sheets.

European & US stock markets follow-through on yesterday's exceptional rise in equities as new Greek debt deal comes into focus. #stocks ^JC

1.33pm BST

The European Central Bank holds its regular meeting next week and some are hoping that it will discuss reintroducing a waiver to allow the central bank to accept Greek bonds (as UniCredit suggested below). FastFT reports ():

Greek officials are optimistic that the eurozone's top monetary policymakers will take a big step towards rehabilitating the country's banking system next week, by deciding to accept Greek bonds as collateral for the European Central Bank's loans for the first time in more than a year.

The ECB's governing council...will meet next Thursday in Vienna. Officials are likely to use the Vienna meeting to discuss whether to reintroduce a waiver that allows the eurozone's central bank to accept Greek debt in its regular auctions of central bank cash. Athens is confident that the council will support the reintroduction of the waiver.

1.16pm BST

Someone else who thinks Germany gave the least ground at the marathon Eurogroup meeting, given the delay on any major decisions on debt. Economist Tullia Bucco at UniCredit Research said:

In our view, there are two important features in this framework that are intended to provide reassurance to the European creditors for which Greece poses a thorny political issue: 1. The bulk of the debt-relief measures will only be granted at the end of the program in 2018, if necessary, and 2. Long-term relief measures remain very vague.

All in all, Germany can be considered to be the winner of the negotiations, given that any major decision on debt relief will only be taken after next year's general elections, whereas the IMF committed to participate financially to the program already before the end of 2016.

Last but not least, we think that the deal would soon allow the ECB to reinstate the waiver for Greek bonds posted as collateral at its refinancing operations. This is good news for Greek banks.

1.13pm BST

There were some tired faces at today's ECOFIN meeting, among ministers who worked late into the night on the Greek agreement.

Greece's finance minister, Euclid Tsakalotos, looked positively pensive at one point:

1.04pm BST

All sides made some concessions at last night's Eurogroup meeting, but it does seem that Germany gave the least ground.

German Finance Minister Wolfgang Schaeuble is probably the one participant in the Eurogroup that completely achieved his objective. His only concession is that he had to compromise on his initial stance that Greece's debt does not need to be discussed before 2023.

There is nothing in this agreement to make him uncomfortable beyond that. It does not require any major changes to the programme's modalities, the targets remain, large-scale debt measures are not due to happen until after the German elections in autumn next year and the IMF has committed that it will go to its board with a recommendation to participate in the Greek programme with financing and a new programme that will ensure policing of compliance and reform implementation.

12.36pm BST

Over in Greece, the government's supporters have hailed the eurogroup deal.

"The review has been concluded, roadmap [agreed] for the debt."

"It's a good decision that allows us to turn the page."

"It won't be able to enforce the measures it has agreed to. This is an agreement that solves no problems and on the contrary creates new ones.

Greece, simply, cannot survive in this currency. There will be a disorderly default and ultimate exit from the euro that will be all the worse for not being planned."

12.30pm BST

Austria's finance minister, Hans Jirg Schelling, hopes that the eurozone will avoid a summer of Greek debt drama.

Austrian Fin Min #Schelling: "I value the Greek summer - but not in Brussels." #Eurogroup #Greece #Eurozone -- @dpa.

12.24pm BST

Analyst Wolfango Piccoli of Teneo Intelligence is concerned that Greece hasn't won the solid commitments which prime minister Alexis Tsipras has promised.

That may make it harder for Tsipras to hold his small parliamentary majority together, and implement the unpopular austerity measures it has agreed to.

12.00pm BST

The Greek agreement is part of a broader strategy to avoid rocking the boat until Britain's EU referendum is over, argues my colleague Jonathan Freedland.

He writes:

Whatever the rights and wrongs of the [Greek] austerity argument, Cameron has wanted the issue to go away - at least for another month. Today's bailout loan has achieved that.

Related: The Greek bailout shows the EU is on its best behaviour - until 24 June | Jonathan Freedland

11.28am BST

Rating agency Moody's has just announced that the Greek deal is "credit-positive".

Moody's says the promise of a10.3bn of bailout loans alleviates the danger that the country defaults this summer.

Although the announcement doesn't provide specifics on the type of relief, it is clear that material relief will be considered only after the program expires in 2018 and remains contingent on the Greek governments' ability to implement successfully the conditions associated with the program.

We consider implementation risks in Greece to remain high, given the small governing majority, weak institutions, and the backdrop of political and social discontent."

It's official: Can-kicking = good https://t.co/oDAY6oQxrA

11.19am BST

Mihir Kapadia, CEO at Sun Global Investments, is relatively upbeat about the deal:

The Eurozone provided Greece with a firm offer of debt relief yesterday at a meeting of finance ministers in Brussels, a decision which could see the Euro provide a10bn in new funds for the country. The IMF seems to have softened its stance significantly from its hard line position as it had previously insisted that Greece's proposed programme did not offer a path to fiscal sustainability.

The positive conclusions to these talks are a good sign on a number of fronts - showing flexibility by the IMF and European ministers, and some early signs of improving confidence in Greece. Greek 10-year bond yields fell below 7% this morning for the first time since November 2015."

11.12am BST

We're going to need a new metaphor....

It buys everybody time, albeit expensive time (over 10 billion euros) until September. Kicking the can down the road https://t.co/16jYZ4CrCu

11.05am BST

Yanis Varoufakis, Greece's former finance minister, has given the deal the thumbs-down:

New supercharged, mututally-reinforcing austerity/recession & no debt relief - another extend-and-pretend Eurogroup https://t.co/6Qgy8CFOLD

10.53am BST

If you missed the Greek agreement, it's online here:

The #Eurogroup statement on #Greece https://t.co/D8lU2f5zjz

10.46am BST

The Financial Times has a good word to describe the Greek deal - "messy".

And that's because the really sticky issue, of how to make Athens' debts sustainable, has been kicked down the road. Although the creditors have made commitments, the agreement released in the early hours of this morning is light on detail.

The ambiguities are legion. A target was set to maintain Greece's gross financing needs at no more than 15 per cent of national income until 2030. And measures were outlined to do that, including maturity extensions and a possible buyout of IMF loans in 2018. The caveat: no numbers were agreed on what relief the measures would actually deliver.

And while the IMF dropped its most ambitious debt relief demands - including the need for them to be automatic when Greece exits its programme in 2018 - there was a big caveat. To participate financially in the programme before the end of the year, the IMF would need to approve a new debt sustainability analysis (DSA) on Greece that would meet its normal lending standards.

10.17am BST

In another reassuring signal from the markets, the yield on 2-year Greek bonds has tumbled below the 10-year bond yield.

Why does that matter? Because it means investors are now rating Greece's short-term debt as less risky than its longer-term borrowings.

Greek bond curve normalises -- 2yr below 10yr yields for first time since March -- in sign of default fears easing pic.twitter.com/GTKpchZX1g

10.12am BST

Although the London market is at a three-week high, City investors do recognise that the details of Greece's debt relief are still up in the air.

Joshua Mahony of IG explains:

Eurozone discussions finally reached a conclusion regarding the restructuring of Greek debt, yet the outcome was far from constructive as ministers decided to kick the can by simply resume talks after the French and German elections.

This issue will drag on for years and there is a feeling that the Greeks will say whatever they need to in order to get a good deal. With austerity crippling the Greek economy, the hopes of it standing on its own two feet and paying back its debts anytime soon seem negligible.

10.06am BST

Robin Bew of the Economist Intelligence Unit is also concerned about Greece's debt mountain, which is currently 180% of GDP.

Unclear who blinked first on #Greece bailout. #Eurozone of #IMF. Greece gets its cash but no mutually acceptable solution to debt overhang

8.59am BST

The International Monetary Fund is coming under fire from debt campaigners this morning.

They're disappointed that the Fund has abandoned its commitment to "upfront" Greek debt relief as part of last night's deal.

"IMF staff are proposing to lend more money to Greece without the upfront and unconditional debt relief they called for. This is a major climb down, which once again breaks the IMF's own rules not to lend when they know a debt cannot be paid.

"Eurozone finance ministers cannot keep repeating this pattern of sticking plaster measures followed by near defaults and all night crisis meetings for the next 40 years. Only significant cancellation of Greece's debt now, including payments coming due now such as to the IMF and ECB, will help tackle the humanitarian crisis in the country and restore the lack of confidence which is holding back Greece and the wider European economy."

8.58am BST

Economist Megan Greene, of asset management firm Manulife, says Berlin appears to have won last night's Tussle in Brussels:

Summary of Eurogroup: Germany always wins, IMF caves under pressure from Germany and US, no one does what's in Greece's best interests

8.47am BST

Greece's stock market has jumped by 1.4% in early trading, led by bank stocks.

8.45am BST

Greek government bonds are on an absolute tear this morning, as fears of a disorderly default fade away.

The country's 10-year bonds are rallying hard, driving down the interest rate (or yield) on the debt below 7% for the first time since last November.

#Greece's 10y yields drop below 7% for first time since Nov after deal w/ creditors. pic.twitter.com/Uc8QEm0mAg

8.40am BST

Henrik Enderlein, director of the Jacques Delors Institute, sums up the deal:

They're still kicking the can down the road on #Greece, even if they're now kicking in the right direction.

8.38am BST

After a few hours sleep, Eurozone ministers are returning to the Justis Lipsius building for a full Ecofin meeting with EU ministers.

They won't be discussing Greece - instead, they'll be debating an anti tax avoidance Directive.

The IMF was asking a lot, and we were asking a lot of Greece.

8.28am BST

Marc Ostwald of City firm ADM Investor Services is also underwhelmed by the deal:

This is another to be sorted under 'can kicking', leaving any decision on genuine debt relief until 2018, after the French and German elections, but also not creating any precedents or short-term crises which might influence the Italian municipal elections on June 5, the UK Brexit referendum on June 23 or the Spanish election on June 26.

It also continues to impose austerity measures which will continue to strangle the Greek economy, per se ensuring that the next crisis moment in the Greek saga will not be far away.

8.27am BST

European stock markets have jumped in early trading.

8.19am BST

Peter Spiegel, the FT's former Brussels bureau chief, isn't completely convinced by the agreement.

So #Greece & #IMF have fallen for German promises of future debt relief...again? Nov 2011, July 2015, now 2018...won't be holding my breath

8.16am BST

Last night's deal may not be perfect, but it appears to 'kick the can' down the road until after France and Germany have gone to the polls in 2017.

Analysts at RBC Capital Markets explain:

a7.5bn will be released in June that will allow Greece cover maturing IMF and ECB loans in June and July and begin to clear arrears which have built up as the review process has stalled. The outstanding portion of the payment will then be made after the summer. There was also agreement on a roadmap for Greek debt relief. In the short term this is mainly through managing the interest rate and repayment profile of euro area loans. Further out, there was commitment on further measures once the programme is completed in 2018.

While not quite the unconditional debt relief the IMF had called for in its assessment of Greece's debt sustainability, the measures are sufficient for the Fund to stay involved in the programme although that will still have to be formally approved by the IMF board.

8.13am BST

Money is pouring into government debt issued by the eurozone's weaker members this morning, as investors react to Greece's debt real.

This has driven down the yield (or interest rate) on peripheral government bonds -- a sign that traders are happy to buy these riskier assets.

Portugal's 10-bond yield fell 4.8 basis points to a three-week low at 3.02%, while Spanish and Italian 10-year bond yields fell to one-month lows at around 1.51% and 1.40% respectively.

"The agreement between Greece and its creditors is positive for risk sentiment and in turn peripheral bond markets," said Rene Arecht, a derivatives market analyst at DZ Bank.

8.01am BST

Our Brussels correspondent, Jennifer Rankin, explains how the IMF has backed down over its demands for immediate Greek debt relief:

European officials have agreed to unlock a10.3bn in bailout money for Greece as the International Monetary Fund made a significant climbdown in its demand for upfront debt relief for the recession-hit country.

Greece's international creditors emerged from an 11-hour meeting in Brussels at 2am on Wednesday having agreed on steps to ease the burden of Greece's a321bn (245bn) debt mountain, worth 180% of annual economic output.

Related: Eurozone unlocks a10.3bn bailout loan for Greece

7.46am BST

Good morning.

There's a sense of relief in the eurozone this morning after Greece and its creditors finally hammered out a deal to unlock a10bn in bailout funds, and trigger work on debt relief.

Related: Eurozone reaches breakthrough on Greek bailout and debt relief - as it happened

"We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme....

This is stretching what I thought would have been possible not so long ago."

We welcome that all stakeholders recognise that Greek debt is unsustainable. We welcome that it is understood that Greece needs debt relief to make it sustainable.