BRUSSELS (REUTERS) - Euro zone leaders clinched a deal with Greece on Monday to negotiate a third bailout to keep the near-bankrupt country in the euro zone after a whole night of haggling at an emergency summit.
"Euro summit has unanimously reached agreement. All ready to go for ESM programme for Greece with serious reforms and financial support," European Council President Donald Tusk announced on Twitter, referring to the European Stability Mechanism bailout fund.
However the tough conditions imposed by international lenders led by Germany could bring down Prime Minister Alexis Tsipras' leftist government and cause an outcry in Greece.
Even before the final terms were known, his labour minister went on state television to denounce the terms. "We were able to keep the unity on keeping Greece inside the euro zone," Slovenian Prime Minister Miro Cerar said on his Twitter account.
European shares surged in early trading on Monday after news of the agreement.
The euro zone's blue-chip Euro STOXX 50 index rose 1.3 per cent, while the pan-European FTSEurofirst 300 index was up 1 per cent by 3.06 pm Singapore time.
Germany's DAX, France's CAC and Britain's FTSE 100 rose 0.6 to 1.4 per cent. The euro zone's banking index also advanced 1.5 per cent.
The euro meanwhile erased a decline against the US dollar. The 19-nation shared currency was little changed at US$1.1165 as of 7:51 a.m. London time after earlier dropping as much as 0.7 per cent.