Euro zone finance ministers signed off on €1.1 billion of aid for Greece on Monday but delayed sanctioning an additional €1.7 billion after divisions emerged between states about whether the country had fulfilled requirements set out by European lenders.

Finance ministers had been due to consider a €2.8 billion disbursement – the final funding segment under the first review of the Greek bailout – but German finance minister Wolfgang Schäuble voiced objections during the meeting, according to sources.

Minister decided to withhold €1.7 billion in funding, which is linked to the payment of arrears, until data related to the payment is provided by authorities. Eurogroup president Jeroen Dijsselbloem said he “hopes and presumes” this information would be provided by the end of this month, when the money will be paid into a specific account to be used for arrears clearance.

The commencement of the second review is an important step for Athens, as euro zone finance ministers indicated in May that discussions on debt relief could commence once the first review is concluded.

Germany, which is facing national elections next year, is wary of granting debt relief to Greece, but at the same time has indicated it wants the IMF to be a partner in the bailout programme.

Precondition

The Washington-based fund has repeatedly said that debt relief is a precondition for its involvement in the third Greek bailout.

Mr Dijsselbloem said he hoped the IMF would make a decision on its involvement in the Greek bailout before the end of the year. He said that debt relief would be discussed by Greece’s lenders at a later point, as indicated in the eurogroup’s May announcement.

EU economics commissioner Pierre Moscovici said commission officials would return to Athens in the second half of this month to begin technical work on the second review.

“This will move the focus from tough legislation to implementation of the reforms which is not easy but which is as divisive,” he said, adding that Europe “must try and build a success story with Greece now”.

Greece’s third international bailout was agreed 14 months ago after months of fractious negotiations between the EU and the Syriza government, which swept to power in Greece in January 2014 on an anti-austerity message.

The Greek government, led by Syriza leader Alexis Tsipras, has been implementing a series of “milestones” set out by lenders, including announcing the privatisation of utilities and telecoms assets and further pension reform.

Tensions

Mr Dijsselbloem praised Greece for introducing “important reforms” on pensions, the energy sector, bank governance and the establishment of the privatisation fund.

However, tensions continue in the country over the continuing demands for reforms, with police officers controversially using tear gas against protesting pensioners last week.

Syriza this week meets for a party congress, as Mr Tsipras continues to face challenges in keeping his most radical-left members on board during the bailout discussions.

Meanwhile ministers from all 28 member states convene on Tuesday for a second day of meetings at which new Basel rules and the fallout from last week’s IMF meetings will be discussed.

Ireland, which was represented by Minister of State for Finance Eoghan Murphy at Monday’s eurogroup, will be represented at ambassadorial level on Tuesday due to the budget.

A sub-set of EU states were due to meet on Monday night to discuss the state of play of the financial transaction tax, amid concerns about the future of the tax. Ten countries signed up for the proposed EU levy on financial transactions in 2012, after most EU countries, including Ireland and Britain, opted out.