Greece will have until 2021 to repay its €110-billion ($145.7-billion) EU/IMF bailout loan, the country’s finance minister said on Monday.

In return, Greece will have to pay a higher fixed interest rate of about 5.8 per cent from 5.5 per cent, George Papaconstantinou told reporters.

“The repayment, which was now until 2015, will go to 2021 ... we have a grace period of four years and a repayment period of seven years,” Mr. Papaconstantinou said. “The decision is very important, it opens the way to return to markets earlier than expected.”

EU sources said an informal deal to extend the repayment was reached at a meeting of euro zone finance ministers on Ireland on Sunday and that this will be detailed and formally agreed at the next Eurogroup and Ecofin councils on Dec 6-7.

Parliaments of euro zone countries must approve the decision.“The decision has been taken to have an equal treatment with Ireland and send a message to markets,” Mr. Papaconstantinou said.

He said this would not affect Greece’s fiscal consolidation plan, which analysts warned must be rigorously adhered to.

“The repayment extension will give Greece more breathing space, it may facilitate its return to markets – it’s easier to go out and borrow €50-billion instead of €80-billion,” said Alpha Bank economist Michael Massourakis.

“But all this rests on the condition that the fiscal program to shore up its public finances is strictly implemented,” he said.