(Repeats to fix technical glitch)
* Greece to return to financing on Aug. 20
* Greece to implement final batch of reforms
* Eurozone to review progress in May
By Jan Strupczewski and Francesco Guarascio
SOFIA, April 27 (Reuters) - Euro zone finance ministers will decide in June on further debt relief measures for Greece and the size of a final disbursement of loans to keep the country liquid after it exits from eight years of international bailouts, officials said on Friday.
Greece’s government bond yields hit a 2-1/2 month low on the news.
Greece is to return to market financing on Aug. 20 after more than eight years of living on cheap euro zone loans it got in return for painful reforms, after investors refused to lend to it in 2010 because of its ballooning deficit and debt.
Once the bailout ends, Greece will be free to set its own economic policy - a political turning point for the country that has been forced to implement highly unpopular reforms suggested by the euro zone and the International Monetary Fund.
But before it gets there, it needs to implement the final 88 changes to its economy - the last batch of reforms agreed with euro zone creditors. Some of them, like the liberalisation of the energy market, or privatisation, are difficult.
“Greece remains fully committed to the reform agenda. With the programme well on track and approaching the end, we are already preparing the post-programme period,” the chairman of euro zone finance ministers Mario Centeno told a news conference after the ministers’ meeting in Sofia.
In a sign of confidence that the remaining reforms will be completed on time, euro zone ministers decided that their representatives will travel to Athens on May 14 to review progress and prepare a final report.
A positive report would open the way for the euro zone to decide on new debt relief measures and a final disbursement to Athens at the ministers’ meeting on June 21. The final loans are to create a cash buffer for the country to cover it for 18 months after the bailout and ease its return to markets.
“On the basis of a successful review, the Eurogroup will decide in June all the elements that can help facilitate the exit of Greece from the programme by August,” Centeno said.
Greece has turned its 15 percent of GDP budget deficit in 2009 into a budget surplus of 0.8 percent last year, but many officials are worried that as time passes, Greek politicians will be under pressure to loosen budget strings.
They therefore seek ways to make it worth Greece’s while to be fiscally prudent as long as possible, especially that the euro zone, which has lent Greece 187 billion euros, wants to get its money back.
“The objective of all the different reforms of the last 8 years had one clear target: to create a new basis for healthy growth in Greece. We want to be repaid one day,” the head of the euro zone bailout fund Klaus Regling told the press conference.
To reassure the euro zone that reforms would not be reversed, Greek Finance Minister Euclid Tsakalotos presented a strategy for boosting economic growth in the coming years.
“It underlines Greek ownership of the reform process. This exercise is key for the future of Greece ... ownership is critical for the sustainability of the current economic recovery in Greece,” Centeno said.
To keep a degree of control over Athens’ policies even after the bailout, some euro zone countries would like Greece to ask for a precautionary credit line from the euro zone bailout fund, which would entail conditions on Athens. But that is exactly why the left-wing government of Alexis Tsipras does not want it.
Euro zone officials therefore seek to link some of what they consider sound policy goals - like a primary surplus of 3.5 percent of gross domestic product until 2022 - to debt relief.
The euro zone offer is likely to include some debt relief up front and some spread over time.
Since Greece will not have used all the money earmarked for it in the latest bailout, possibly up to 27 billion euros, that could be used by the euro zone to replace much more expensive IMF loans to Greece with its own, cheaper credit.
There is no discussion of a reduction of the nominal value of the debt, but Greece might get back the profits made by euro zone central banks on their portfolios of Greek bonds and see maturities and grace periods on euro zone loans extended. (Additional reporting by Tsvetelia Tsolova in Sofia and Fanny Potkin in London; Editing by Peter Cooney and Matthew Mpoke Bigg)