IMF approves Greece's bailout in principle

WASHINGTON - 21 July 2017: A new cap on debt in the International Monetary Fund's latest Greek bailout approved on Thursday keeps pressure on Europe to deliver debt relief and prevents Athens from raising fresh cash in the markets anytime soon, reported Bloomberg news agency on Friday.

The IMF's board backed a $1.8 billion bailout for Greece, but only "in principle," since it still considers the country's debt is "unsustainable" without significant relief by Athens's European creditors, it added.

The ceiling on the amount of debt Greece can hold -- detailed in documents prepared well ahead of Thursday's meeting and signed by the Greek government -- gives Athens and Europe little room to wiggle out of commitments they made to overhaul the economy and restructure the country's debt.

Greece's IMF bailout sets a debt-stock ceiling for the central government at around EUR325 billion ($374 billion), accounting for the country's current debt and the bailout funds it receives from its European creditors.

While Greece could go back to the markets to manage its debt -- swapping out old bonds for new bonds at better terms, if they can get them, for example -- the cap would prevent new bond issuance to build up a cash buffer, as Athens had been considering, added the agency.