Eurogroup finance ministers on Friday evening approved the proposal of an 86-billion-euro (about 95 billion U.S. dollars) bailout package to keep Greece afloat and secure the debt-torn country's stay in the single currency bloc.
The "positive" outcome of the hours-long meeting has made the intense work during past weeks "paid off," Eurogroup President Jeroen Dijsselbloem told a press conference after an extraordinary Eurogoup meeting.
European Commission President Jean-Claude Juncker said in a statement "The message of today's Eurogroup is loud and clear: on this basis, Greece is and will irreversibly remain a member of the Euro area."
The new billion-euro loans will be made available over the next three years to Greece by the European Stability Mechanism (ESM), according to another statement issued by the Group immediately after the meeting.
The first tranche under the ESM program will be worth up to 26 billion euros, in which 10 billion euros will be made available immediately for bank recapitalization.
The other 16 billion euros will be disbursed to Greece in several installments, starting with a first disbursement of 13 billion by Aug. 20, followed by one or more further disbursements in the autumn.
A second tranche up to 15 billion euros can be made available no later than Nov. 15, which aims "for banking recapitalisation and resolution needs," the statement said.
The Eurogroup urged the ESM to approve the proposal by Aug. 19 so as to unlock the initial 26 billion euros as Greece is still in pains of capital control and faces an urgent repayment of 3.2 billion euros to the European Central Bank (ECB) due on Aug. 20.
As to Greece, the statement said it will target a medium-term primary surplus of 3.5 percent of GDP. The fiscal target set in 2015 is a 0.25-percent-of-GDP primary deficit. For 2016 the goal is a primary surplus of 0.5 percent, for 2017 of 1.75 percent and for 2018 of 3.5 percent.
The fiscal reforms are expected to be supported by measures to strengthen tax compliance and fight tax evasion. Meanwhile, new laws for "ambitious" pension system reform will have to be approved by October.
"Greece has furthermore committed to key labor and product market reforms ... as well as to modernise and depoliticise the public sector," the statement noted.
In the financial sector, bank recapitalisation is required in Athens. "Moreover, Greece will take urgently needed steps to tackle the non-performing loan problem."
As privatisation forges "a cornerstone" of the new ESM program, the Eurogroup also called on the Greek government to endorse a plan for an independent fund by the end of October.
The fund, worth up to 50 billion euros, is supported to be established in Greece under the supervision of the relevant European institutions by the end of this year.
The International Monetary Fund (IMF), which has provided "technical assistance" to the weeks-long negotiations between Brussels and Athens, was reported to have refused to participate in Greek third bailout unless the country's debt is restructured.
The Eurogroup on Friday reiterated that the involvement of the Washington-based fund is "indispensable" and welcomes "the intention of the IMF management ... to consider further financial support for Greece."
Earlier Friday morning, the Greek parliament overwhelmingly voted in favor of adopting series of new austerity measures to secure the long-awaited bailout package.
The proposal agreed by the ministers still needs to be approved at political level, ratified by member states and endorsed by the ESM side. (1 euro = 1.11 U.S. dollars)