Finance ministers from the euro-sharing nations agreed over a more than two hour-long conference call on Saturday to release the funds, which represent the fifth tranche of aid from the €110bn bail-out agreed last May.
Ministers said they had noted “with satisfaction” the Greek government’s victory in a crucial parliamentary vote on its beefed-up austerity measures, which met the demands of its European lenders and the International Monetary Fund (IMF).
Athens welcomed the confirmation it will receive the money, without which it would have been in danger of defaulting on its debt as soon as July 15, as it is due to make substantial repayments to its creditors.
“This development strengthened the country’s international credibility,” said Evangelos Venizelos, the new Greek finance minister. “What is crucial now is to implement parliament’s decisions [on austerity] on time and effectively.”
The board of the IMF is expected to rubber-stamp the €12bn instalment, of which it provides a €3.3bn share, this week. Caroline Atkinson, spokeswoman for the international lender, said it welcomed the decision from the eurozone politicians.
"This commitment – together with the recent parliamentary passage of the necessary fiscal measures in Greece – will enable the IMF’s executive board to consider ... the release of the next tranche under the current stand-by arrangement with Greece," she said.
Attention will now focus on the second rescue package planned for Greece, as politicians continue to try to draw a line under markets’ anxieties about the finances of the euro’s weaker members, which have seen Ireland and Portugal follow Greece in receiving bail-outs.
The big question surrounding efforts to resolve the crisis is the extent to which private-sector holders of Greek debt can be led to share the cost with European taxpayers, without this being classed as a default which would risk disastrous effects on the wider financial system.
The finance ministers yesterday reported progress in the talks with investors about supporting a new rescue package by agreeing to roll over their Greek debt, effectively stretching out the loans.
“Consultations with Greece’s creditors are under way in order to define the modalities for voluntary private-sector involvement with a view to achieving a substantial reduction in Greece’s year-by-year financing needs,” the ministers said. The details and “scale” of the private sector’s involvement would be worked out “in the coming weeks”, they added.
The finance ministers had been due to meet in Brussels on Sunday, but that plan was shelved as there appeared to be no obstacle to agreement on the release of the funds.
Separately, Poland marked the start of its six-month stint at the helm of the EU by criticising politicians' response to the crisis in the eurozone, which has seen Ireland and Portgual follow Greece in requiring bailouts as markets questioned their solvency.
Jacek Rostowski, the Polish finance minister, said it was fortunate that the IMF had also been involved in the rescue efforts. "The IMF has been more proactive, programmes have been put forward at an earlier stage," he said. "Thank God the IMF came."
He also warned of the "growing estrangement" between Europe's north and south, a reference to countries which view themselves as fiscally responsible, like Germany, resenting the support they provide to weaker members such as Greece and Portugal.
"We have to be very careful that it [the divide] does not grow and get amplified, that it remains under political control, between countries helped and countries that are contributing to support," he said.