Greece has agreed to tough reforms after marathon talks with eurozone leaders in return for a three-year bailout worth up to 86 billion euros ($129 billion).
European Union (EU) president Donald Tusk said eurozone leaders reached a unanimous deal to offer Greece a third bailout and keep it in the euro after 17 hours of talks.
“One can say that we have ‘agreement’. Leaders have agreed in principle that they are ready to start negotiations on an ESM (European Stability Mechanism) program, which in other words means continued support for Greece,” Mr Tusk said in a statement.
“There are strict conditions to be met.
“The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on an ESM program to formally begin.
“Nevertheless, the decision gives Greece a chance to get back on track with the support of European partners.
“It also avoids the social, economic and political consequences that a negative outcome would have brought.”
This will be Greece’s third rescue program in five years, which will be funded by the European Stability Mechanism, the EU’s bailout fund.
Greek prime minister Alexis Tsipras emerged from the talks saying his government “faced difficult decisions”.
“We took the responsibility for the decision to avert the most extreme plans by conservative circles in Europe,” he said.
“We averted a plan of a financial choking and banking collapse.”
He said a growth package of 35 billion euros and debt restructuring “will make Grexit a thing of the past”.
European shares surged on the news of the deal which prevented Greece from crashing out of the European single currency.
Greece applied last week for a third program from the eurozone’s bailout fund after its previous bailout expired on June 30, leaving it without international financial assistance for the first time in years.
Greek banks have been closed for nearly two weeks and there were fears they were about to run dry due to a lack of extra funding by the European Central Bank.
This would mean Athens would have had to print its own currency and effectively leave the euro.
Athens infuriated its creditors with actions including a surprise referendum on July 5 in which Greeks overwhelmingly rejected previous bailout terms offered by its creditors.
source:abc.net.au
STUDIO 3 NEWCASTLE AUSTRALIA 