Greece to get cash and ideas over debt relief

Greece's international lenders prepared on Thursday to unblock as much as €8.5 billion in loans that Athens desperately needs next month to pay its bills, and to give some idea of what debt relief they may offer over the long-term.

One of the reasons why Greece's bailout program has stalled over the past few months has been a disagreement between the eurozone and the International Monetary Fund on debt relief. The IMF, which has contributed financially to Greece's first two bailouts but not the third, has wanted more information about what debt relief Greece may get before it gets more involved in the current program, which is due to end in the summer of next year.

The euro zone has been reluctant to commit to concrete debt relief numbers now because it argues that if Greece does all that is required of it and keeps a high primary surplus – the budget before debt servicing costs – for decades, it may not need any debt relief at all.

Greece's left-led coalition government has recently taken further cost-cutting measures, including trims to pensions, in hopes of getting a long-delayed rescue loan installment. It needs the money to meet roughly €7 billion ($7.8 billion) in debt repayments in July that it will struggle to meet from its own resources.

Greek Prime Minister Alexis Tsipras has repeatedly said that debt relief is necessary to get the Greek economy back on track.

Despite years of austerity since Greece was first bailed out in 2010, the country's debt burden still stands at about €320 billion ($360 billion), or around 180% of Greece's annual gross domestic product. That's largely because the Greek economy has contracted by around a quarter, meaning a worsening in the debt load even at a time when the country's budget has improved markedly.

The eurozone's top official, Jeroen Dijsselbloem, sought to downplay expectations that the full-scale of the debt relief on offer will emerge Thursday.

"Today we will give more clarity to Greece," he said as he joined the gathering in Luxembourg. "There won't be a figure that rolls out of that. The figure will only come right at the end of the program."

Dijsselbloem said he hoped the meeting will mark a "very positive step forward" that builds on "the huge effort that Greece has put in."

Athens wants a debt relief agreement "that gives clarity to the markets, but of even greater importance, renewed hope to the people of Greece", a government official told Reuters before the meeting.