The European Union will keep Greece on a tight rein after its latest bailout, with sources saying the €85 billion deal will be reviewed by lenders in October and any discussion of debt relief will only come at a later stage.
Greece was forced to accept tougher terms than were initially on offer and its creditors want to be sure that reforms are being carried out as promised.
"There will be a strong first review of the implementation of measures in October," an EU source said.
At the same time, rescue funds for Greek banks will be placed in a special account and the lenders will receive fresh equity only after a "stress test" is finished by the end of October, Reuters reported, quoting sources.
An initial €10 billion will be made available "immediately" to shore up confidence in Greek banks, while authorities conduct a detailed asset quality review that's expected to take several months.
Greek banks will also have to submit viable business plans to European authorities before fresh support is disbursed and will only receive cash once authorities sign off on the plans.
The bailout agreement reached yesterday gives Greece some respite after months of acrimonious talks with its creditors, the imposition of capital controls and a three-week shutdown of its banks.
It has however caused a rebellion in Prime Minister Alexis Tsipras's Syriza party and could force early elections in the autumn, while doubts remain about whether a leftist government, elected on a pledge to reverse austerity, can implement the tough terms of the deal.
The bailout, Greece's third since 2010, must still be adopted by parliament in Athens and approved by euro zone countries.
Tsipras said the agreement would end economic uncertainty as his government submitted a bill outlining a three-year bailout programme to parliament, pushing for quick approval that would allow rapid disbursement of aid.
Tsipras wants parliament to expedite its approval so committees can discuss the agreement before a vote expected tomorrow evening.
That would allow euro zone ministers on Friday to sign off on the deal and pave the way for aid to be disbursed before a €3.2 billion debt repayment falls due on August 20th.
The legislation covers tax and pension reform, public administration reform, the relaunch of a privatisation scheme which stalled earlier in the year and the establishment of a wealth fund for privatisation projects which will be supervised by European institutions.
Details of MOU revealed
According to the 29-page memorandum of understanding Greece agreed with creditors, a copy of which was obtained by Reuters, Athens must move to rapidly privatise ports, regional airports and Greece's power grid operator.
Greece would also take steps to tackle the mountain of bad loans weighing on its banks.
Germany, the major euro zone contributor to successive Greek bailouts, welcomed the deal as a "substantial result" but wanted to study it further before submitting it for approval by parliament in Berlin.
Germany's Bild newspaper, however, said the government believes the bailout is insufficient. Several open questions remain, including the role of the International Monetary Fund debt sustainability and privatisation plans.
EU sources said on Wednesday that the long-running and often bad-tempered negotiations on the bailout improved after combative finance minister Yanis Varoufakis was removed from the talks.
