Greece, lenders clinch bailout deal after marathon talks

World Today

A man carries a closet past an abandoned branch of the National bank in Athens, Greece, on Sunday, Aug. 2, 2015. In Athens, the heads of the EU-IMF audit mission met with the Greek ministers of finance and economy with the talks focusing on bank recapitalisation, privatisations and fiscal targets, the finance ministry said. (AP Photo/Yorgos Karahalis)

Greece and its international lenders reached a multi-billion euro bailout agreement on Tuesday after talking through the night, officials said, potentially saving the country from financial ruin.

The agreement, reached after a 23-hour session of talks, must still be adopted by Greece’s parliament and eurozone countries. The single currency bloc’s finance ministers are due to meet on Friday, giving time to finalize the deal before a major debt repayment next week.

The negotiations appeared to have resolved all the main outstanding issues, after Greece’s leftist government effectively capitulated last month to creditors’ demands for deep austerity measures in order to receive loans.

“Finally, we have white smoke,” a Greek Finance Ministry official said after exhausted Greek officials emerged in a central Athens hotel to announce the two sides had agreed on terms. “An agreement has been reached.”

Finance Minister Euclid Tsakalotos confirmed only “two or three small issues” were pending. Greek shares rose, with the banking index surging 6 percent, while two-year bond yields fell more than 4 percentage points.

“The institutions and the Greek authorities achieved an agreement in principle on a technical basis. Now as a next step, a political assessment will be made,” European commission spokeswoman Annika Breidhardt said in Brussels.

Still, officials in skeptical northern European countries remained cautious, pending final approval of the deal.

“There remains work to be done with details,” said Finland’s Finance Minister Alexander Stubb. “We must take one step at a time. Agreement is a big word.”

Commission President Jean-Claude Juncker was due to hold talks later on Tuesday with German Chancellor Angela Merkel and French President Francois Hollande.

Report by Reuters.