Greece reaches deal with creditors on reform pacakage

Greece's Finance Minister Euclid Tsakalotos said on Tuesday that Athens had reached a deal with European financial institutions and the International Monetary Fund that would free up a 2 billion euro (US$2.15 billion) tranche of aid and 10 billion euros ($10.7 billion) to help recapitalize four main banks.

The initial aid disbursement has been held up as financial reforms stalled over disagreement with creditors over foreclosure protection for primary residences, the repayment of tax and pension arrears and revenue from the valued-added tax.

"There was an agreement on all the milestones ... whatever was required," Tsakalotos told reporters after meeting with creditors, adding that parliament could now pass the reforms.

Greece and international creditors agreed on a third aid package of up to 86 billion euros ($92 billion) earlier this year in exchange for which Greece must implement tax reforms, privatization and unpopular austerity measures.

Greece would like to speed up the reform process and pass an initial assessment, which would then allow Athens and creditors to negotiate debt structuring.

Under the agreement reached on Tuesday, foreclosure protection will be provided for the primary residences, or about 60 percent bad mortgages out of 400,000 homeowners.

Greece had wanted to protect the poor from being foreclosed on and under the agreement families with incomes below poverty line will get foreclosure protection, while others will be given a three-year period if they restructure their debts with banks.

cw/jil (dpa, Reuters)