ATHENS • Greece and its international lenders reached an €85 billion (S$129 billion) bailout agreement yesterday after talking through the night, officials said, saving the country from financial ruin and raising hopes that it can make a major debt repayment next week.
After a 23-hour session that began on Monday morning, exhausted Greek officials emerged in a central Athens hotel to announce that the two sides had agreed on terms of the three-year deal, barring a few minor issues that were being ironed out.
"Finally, we have white smoke," a finance ministry official said. "An agreement has been reached." Finance Minister Euclid Tsakalotos confirmed that only "two or three small issues" were pending.
Greek shares rose, with the banking index surging 6 per cent, while two-year bond yields fell more than 4 percentage points.
The deal reached by creditor institutions still needs political approval from euro zone member countries. European Commission President Jean-Claude Juncker was scheduled to hold talks with German Chancellor Angela Merkel and French President Francois Hollande, commission spokesman Annika Breidthardt said.
"The institutions and the Greek authorities achieved an agreement in principle on a technical basis," said Ms Breidthardt.
"Now, as a next step, a political assessment will be made."
An agreement would close a painful chapter of aid talks for Greece, which had fought hard against austerity terms demanded by the creditors for much of the year, before relenting under the threat of being bounced out of the euro zone.
After an in-principle deal last month on keeping Greece in the euro zone, the latest round of talks began in Athens three weeks ago to craft an agreement covering details of reform measures, the timeline for their implementation and the amount of aid needed. A Greek Finance Ministry official said the pact would be worth up to €85 billion in fresh loans over three years.
Greek banks would get €10 billion immediately and would be recapitalised by the end of the year.
Greek officials have said they expect the accord to be ratified by Parliament today or tomorrow, and then vetted by euro zone finance ministers on Friday.
This would pave the way for aid disbursements by Aug 20, when a €3.2 billion debt payment is due to the European Central Bank.
Facing a revolt from the far-left of his leftist Syriza party, Prime Minister Alexis Tsipras is expected to once again rely on opposition support to push the package through Parliament.
Once the deal is ratified, Mr Tsipras is expected to tighten his grip over the party by facing down rebels at a party congress next month before considering early elections.