Eurozone approves Greek reforms, clearing hurdle for funding extension

Eurozone finance ministers on Tuesday approved a list of reforms submitted by Greece as a condition for creditor nations extending funding to the country for an additional four months.

The approval of the reform package — part of the concessions offered by Athens last week as a deadline over its bailout neared — was announced by Dutch finance minister and Eurogroup chair Jeroen Dijsselbloem.

“Following Eurogroup teleconference decision, national procedures for extension of the Greek program can begin,” he said.

The announcement will stave off the immediate threat of Greek banks running out of cash — a development that could have pushed Athens into printing its own money and exiting the eurozone. It followed the submission Monday of a six-page document signed by Greece’s finance minister Yanis Varoufakis, which rolled back on election promises made by the anti-austerity, leftist Syriza government.

Campaign pledges to halt privatizations, boost welfare spending and raise the minimum wage were all watered down in the resulting document. Instead the plan envisages consulting with partners before implementing key reforms and keeping all moves budget neutral. It also seeks to clamp down on tax evasion and corruption in the country

The measures represents a climb down by Athens, but one that will buy it more time to negotiate better terms on debt repayment.

Eurozone ministers said Greece still needed to flesh out some of the details. But for the time being was content with the proposed reforms.

EU financial Affairs Commissioner Pierre Moscovici said the plan from Athens is “sufficiently comprehensive to be a valid starting point.”

“We are encouraged by the commitment to combat tax evasion and corruption … as well as pursue reforms to modernize the public administration,” he added.

The proposal to extend Greece's funding — which was due to ends at the end of the month — now goes to some member nations for formal approval.

The plan was sent just ahead of a Monday deadline imposed on Athens by creditor nations. News that the eurozone had accepted Athens’ list of reforms — and avoided the risk of bankruptcy for the country — was cheered by investors. The main stock market in Athens was up around 9.8 percent by late Tuesday afternoon trading.

Though the reform measures were welcomed, eurozone ministers still pressed Greece to take further steps.

"We call on the Greek authorities to further develop and broaden the list of reform measure," the eurozone said in a statement.

Dijsselbloem also urged Athens to move quickly, pointing out that the reform program needs to be updated and implemented within four months.

Friday’s agreement to an extension, on condition of a reform package, came at the end of a tense week of negotiations between Greece and skeptical eurozone nations, led by Germany.

Berlin’s initial rejection of a six-month loan extension forced Athens to back away from its some aspects of its election promises, including scrapping bailout austerity conditions that Syriza blamed for imposing further economic hardship of Greeks. It also rolled back from a pledge to end cooperation with the “troika” of EU, European Central Bank and International Monetary Fund (IMF) inspectors.

Despite Athens capitulating on key areas, some within the troika still appeared intent on squeezing more out of Athens.

The IMF was seemingly the most downcast on the Athens’ reform plan, insisting that vague promises in Tuesday's list now needed to be turned into real actions.

In a letter to Dijsselbloem, IMF managing director Christine Lagarde said that in many key areas, the list "is not conveying clear assurances that the government intends to undertake the reforms envisaged."

Lagarde specified there were no "clear commitments to design and implement" VAT and pension policy reforms, or "unequivocal undertakings" to continue previously agreed policies to open up closed sectors, on administrative reforms, privatization and labor market reforms.

Al Jazeera and wire services