Greece is edging closer to a deal with creditors on a debt relief package and it could be signed off at Thursday’s Eurogroup meeting, according to EU officials.

The country has endured eight years of austerity in exchange for more than €260 billion in financial aid from European countries and is due to leave the rescue programme in August this year.

Eurozone partners are due to unveil a new package to ensure the country survives market pressures when it does, allowing reforms to be implemented and the financial situation to go on improving.

After exiting from the bailout programme, Greece will be treated as a normal country and no precautionary line of credit will be put in place, the EU’s Economic and Monetary Commissioner Pierre Moscovici said.

Instead, an ‘enhanced surveillance system’ will be introduced and creditors will allocate a monetary buffer of between €11 billion and €20 billion to Athens to cover its debts until 2020.

Greece could also be given the chance to repay €7 billion of IMF and other loans with higher interest rates.

The ‘enhanced surveillance’ will monitor that the country’s economy remains on track, with quarterly progress reports being produced by the Commission, the International Monetary Fund, the European Central Bank and the European Stability Mechanism.

The European Central Bank has joined the IMF and European Commission’s to insist on “credible” measures to reduce Greece’s rising public debt, which stands at more than 178 per cent of GDP, once the country exits the rescue programme.

Eurozone ministers are expected to reach an agreement during the Eurogroup meeting this week, although some technical details may not be agreed upon until a later date.

The Greek parliament is due to vote on the outstanding reforms this week, but even if they are approved, the crunch will come when Greece exits the programme and faces the harsh reality of the financial markets.

(Banner image: Ava Babili )