Thursday's deal is unlikely to please many in his leftist Syriza party who had accepted to support the unpopular budget-cutting policies - to be enacted once the current three-year bailout programme ends in August 2018 - only on the condition that debt relief would be achieved.
German Finance Minister Wolfgang Schaeuble, left, speaks with from right, European Commissioner for Economy Pierre Moscovici, Greek Finance Minister Euclid Tsakalotos, and French Finance Minister Bruno Le Maire during a meeting of eurogroup finance ministers at the European Council building in Luxembourg on Thursday.
"I remain confident that we will find an agreement today on the payment of the latest tranche of Greece's bailout", Schäuble said as he arrived for talks in Luxembourg to discuss the delayed Greek bailout with his eurozone counterparts.
Greece's creditors on Thursday said they would release a further tranche of funds to the indebted country, and the IMF said it stood ready to offer a standby arrangement, removing considerable uncertainty over the fate of the Greek bailout program.
But the International Monetary Fund, with much more conservative estimates and stressing previous Greek underperformance on targets, says it is unrealistic to demand high primary surpluses for so long. "And Greece is among the top performers in terms of the use of European Union funds", Dombrovskis said as quoted by the Commission's press service in a read-out of the college meeting.
Debt relief is needed to help Greece expand its economy, he said, noting that Athens was not asking for a debt cut, but rather lower interest rates or longer repayment schedules.
Separately, IMF Managing Director Christine Lagarde will present the fund's assessment of the euro-area's economic situation and the ways it plans to tackle policy challenges.
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.
"I am optimistic that we will have a good solution". The measures will be triggered next year, to the extent that this will be deemed necessary by a debt sustainability analysis, as May 2016 Eurogroup statement had already made clear.
The issue of debt relief for Greece has sharply divided its global creditors, the European Union and the worldwide Monetary Fund, for months in the latest round of talks.
Germany's parliament has insisted on International Monetary Fund participation.
Papadimitriou told German newspaper Die Welt in an interview published on Thursday that Schaeuble first had acknowledged that Greece had met the requirements, but then changed his mind.
"Greece has fulfilled its commitments and adopted the required reforms".
But in Greece expectations appeared gloomier, with state-run media quoting an anonymous government official as saying the two sides were "very far" from an agreement.
More than 2,000 elderly protesters have marched through central Athens to protest further pension cuts imposed by the government as part of efforts to ensure Greece gets its next installment of rescue loans from European creditors.
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