Eurozone backs Greek reform plan and four-month extension

By Jan Strupczewski & Matthias Sobolewski

Greece secured a four-month extension of its financial rescue on Tuesday when its euro zone partners approved a reform plan that backed down on key leftist measures and promised that spending to alleviate social distress would not derail its budget.

Finance ministers sealed the decision in a one-hour telephone conference convened by Eurogroup chairman Jeroen Dijsselbloem after the new leftist-led Athens government sent him a detailed list of reforms it plans to implement by July.

"Following Eurogroup teleconference decision, national procedures for extension of the Greek programme can begin,» Valdis Dombrovskis, the European Commission vice-president for the euro, said on Twitter.

The ministers reviewed a six-page document signed by Marxist Finance Minister Yanis Varoufakis that watered down campaign promises to halt privatisations, boost welfare spending and raise the minimum wage, vowing to consult partners before key reforms and to keep them budget-neutral.

Both the European Commission and the International Monetary Fund called the Greek letter «sufficiently comprehensive to be a valid starting point for a successful conclusion of the review».

In a statement, the 19-nation Eurogroup urged Greece to develop and broaden the list of reform measures, based on «the current arrangement» - a euphemism for the bailout agreement which leftist Prime Minister Alexis Tsipras had vowed to scrap.

In a foretaste of tough negotiations to come, IMF Managing Director Christine Lagarde said the reform plan was «not very specific» and much clearer assurances would be needed on key reforms of pensions, taxation and privatisation.

And Slovak Finance Minister Peter Kazimir, reflecting...