Greece secures bailout deal after all-night talks

ECB, IMF & European Commission agreed on measures and prior actions that will unlock some Euro 86 billion in funds for Greece

Greece reached an accord with creditors on the terms of a third bailout, paving the way for national parliaments to vote on the deal before an August 20 payment falls due to the European Central Bank.

After almost two weeks of intensive talks, the four institutions representing Greece's creditors - the ECB, the International Monetary Fund, the European Commission and the European Stability Mechanism rescue fund - agreed on measures and prior actions that will unlock some Euro 86 billion ($94 billion) in funds for Greece.

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The talks successfully wrapped up in the early hours of Tuesday, Finance Ministry spokesman Theodoros Mihopoulos said in a text message. Finance Minister Euclid Tsakalotos told reporters that just "one or two very small details" remain, in comments broadcast on Skai TV. An EU official confirmed a deal had been struck, asking not to be named because the talks are private and details have still to be announced.

Greece's parliament must now pass the reform or fiscal requirements before a meeting of euro-area finance ministers tentatively scheduled for Friday. A draft of the memorandum of understanding includes 35 so-called prior actions the country must pass immediately, with more measures to follow in October, before aid can be released, Kathimerini newspaper reported, citing a copy of the draft. Greek Prime Minister Alexis Tsipras's government needs a quick release of about Euro 20 billion to create a buffer for its banks and to make loan payments. The Athens Stock Index rose 1.8 per cent at 10:49 am. in Athens after increasing 2.1 per cent Monday in anticipation that a deal was near. The yield on Greece's Euro 2.1 billion of 3.375 per cent notes due 2017 plunged 352 basis points to 14.7 per cent. That's down from a high this year of 63.3 per cent in July.

"One needs to look closely and then we'll ask the Bundestag for approval when the common understanding is that this will hold for three years," Jens Spahn, a deputy to German Finance Minister Wolfgang Schaeuble, said on ARD television.

"It has to be convincing that it isn't just about August 20 and an installment payment, but really about how, together with the Greeks, we can have a lasting solution."

People are "too pessimistic" on the likelihood of a deal for Greece succeeding, Erik Nielsen, global chief economist at UniCredit Bank AG, said in a Bloomberg Television interview.

"I don't know if it's going to work but I wouldn't write it off," Nielsen said on Monday. In any case, Greece won't leave the euro "because they were out there looking into the abyss and decided they didn't like it," he said. "That is not a very big risk."

The commitment to seek another bailout backtracks on Tsipras's election pledges, prompting a rebellion within his Syriza party. He has called an emergency Syriza congress for September.