Eurogroup agrees on ESM support to Greece

The Eurogroup on Thursday agreed to offer Greece a three-year grant from the European Stability Mechanism (ESM), following the Greek parliament's approval of austerity measures demanded by creditors earlier in the day.

However, doubts about the Greek debt sustainability remain as some believe the bailout deal may not work without "haircuts".

"We reached today a decision to grant in principle a three-year ESM stability support to Greece, subject to the completion of relevant national procedures," the Eurogroup said in a statement after a teleconference among its finance ministers, Xinhua reported.

European Union (EU) institutions are expected to swiftly negotiate with the Greek government on a memorandum of understanding (MoU) "detailing the policy conditionality attached to the financial assistance facility", the statement added.

The negotiation will follow the "completion of the relevant national procedures and the formal decision by the ESM board of governors expected by the end of this week," it said.

The Eurogroup also urged Greek authorities to "swiftly adopt the second set of measures by July 22 as foreseen in the Euro Summit statement".

Heads of the 19 eurozone member states on Monday reached a fresh bailout deal for Greece worth up to 86 billion euros (about $94 billion) and promised swift negotiations on a MoU as soon as Greek lawmakers ratify their summit statement and approve a first set of austerity measures on July 15.

A total of 229 Greek lawmakers of the parliament's 300 seats on early Thursday voted in favour of the summit statement and the first set of taxation and pension system reform measures, with 64 against and six abstentions.

The approvals are viewed as prerequisites for Greece and its creditor's further talks on the new bailout plan.