The EU and IMF today concluded a drawn-out audit of Greece's economic recovery programme, paving the way for bankruptcy-saving loan funds, but called for more reform measures after 2012.
A mission from the two organisations and the European Central Bank, which are monitoring a major overhaul in Athens in return for a 110-billion-euro ($149-billion) bailout extended last year, said agreement was reached to bring the programme on track.
"The mission has reached staff-level agreement with the authorities on the economic and financial policies needed to bring the government's economic programme back on track," said a joint statement from the creditors, known as the 'troika' in Greece.
It said that a 8.0 billion euros loan installment will be available "most likely in early November" following approval by eurozone finance ministers and the IMF's executive board.
Greek reserves to pay wages and pensions run out in mid-November.
The eurozone debt drama has sent shivers across the world over concerns it could trigger a new global recession. US President Barack Obama has called on Europeans to act fast to stem the crisis.
The EU is scheduled to hold a summit on the crisis on October 23.
The high-level 'troika' representatives had begun the quarterly audit in late August, but talks were suspended after less than a week over Greek fiscal slippage and only resumed in late September.
The government pushed through additional austerity measures in the meantime, including a controversial new property tax and drastic cuts in income tax breaks.
It also pledged to eliminate inequalities in public sector pay and put 30,000 civil servants on temporary layoffs to further trim the state payroll.
The EU-IMF audit mission gave credit to Greece for achieving a major reduction in the public deficit since the start of the adjustment programme in 2010, despite a deep recession -- which unions blame on the austerity measures.
But it noted that a further contraction in the Greek economy and slippage in the implementation of some agreed measures made the original 2011 deficit reduction target untenable.
Greece's main challenge remains its structural reforms, the experts said.
"As overall progress has been uneven, a reinvigoration of reforms remains the overarching challenge facing the authorities," they said.
The government earlier this month changed its public deficit forecast to 8.5 percent of Gross Domestic Product this year, missing the 7.4 percent target agreed with the IMF and European Union last June.
The deficit stood at 15.4 percent in 2009. It was revised to 15.8 percent by the Greek statistics agency earlier this month.
The team of auditors said additional measures announced by the government after a break in the talks in early September "should be sufficient" to maintain the 2012 deficit target of 14.9 billion euros.
But they noted that other measures were likely to be needed to meet targets in 2013 and 2014, while warning the government to carry out fiscal consolidation "in a socially acceptable manner" after a major public backlash against the latest austerity measures.
Earlier this month, the government said it expected a 2012 public deficit at 6.8 percent of GDP, up from the 6.5 percent forecast made in June, due to a deeper than expected recession.
The troika mission also noted that revenue from a privatisation drive that is an integral part of a new EU rescue of Greece agreed in July will be "significantly lower than expected" because of preparation delays and adverse market conditions.
"The government remains, however, committed to the revenue target of 35 billion euros by the end of 2014," the statement said.
Eurozone leaders agreed in July to provide Greece with a second bailout and expand the powers of their rescue fund, in order to insulate the European single currency against future shocks.