MOSCOW (Sputnik) — Last week, following lengthy talks, the Eurogroup reached an agreement on a new bailout package for Greece, with $95 billion to be given to the country over the next three years in exchange for economic reforms. The package has been approved by the Greek government.
The European Commission offered a short-term bridge loan worth some 7 billion euro ($7.6 billion) to assist Greece, which Athens used to make the debt repayments to its intentional lenders, the European Central Bank (ECB) and the International Monetary Fund (IMF).
The S&P said in a statement:
"The upgrade reflects Greece's improved liquidity perspective following last week's consent, in principle, from the Eurogroup to the three-year loan program for Greece via the ESM, alongside the provision of €7.16 billion in three-month bridge financing to the Greek government, which it used on July 20to clear its arrears with the IMF and the Bank of Greece and to repay the ECB."
Greece's default on its stock of commercial debt is "no longer inevitable in the next six to 12 months," the statement said.
Last month, the Greek government rejected a bailout deal proposed by its lenders, later announcing a referendum on the issue. The move surprised eurozone finance ministers and triggered speculation about Greece's possible exit from the euro area.
Earlier this month, S&P forecast a 25-percent GDP decline for Greece if the country withdrew from the eurozone, adding that that scenario would significantly increase its debt burden.
