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Greece bailout extension backed by eurozone

[BRUSSELS] Eurozone finance ministers backed a four-month extension to Greece's financial lifeline on Tuesday after approving a list of reforms demanded by creditors to keep the country afloat and in the single currency.

The 19 ministers signed off in a teleconference call on the proposals, which were submitted by Greece's new left-wing government just minutes before the previous night's deadline.

But parliaments in several countries including powerful Germany must now vote on the extension before Greece's current bailout expires on Saturday, while most of the details still have to be hammered out.

"We avoided a crisis but there are many challenges ahead," EU Economic Affairs Commissioner Pierre Moscovici said.

At last-gasp talks on Friday, the eurozone ministers had agreed a four-month bailout extension but only if Greece came up with a binding list of reforms to put its finances back on track.

Greece has had to be bailed out twice - in 2010 and 2012 - to the tune of 240 billion euros, leaving the country with debt worth a massive 175 per cent of annual economic output.

Prime Minister Alexis Tsipras, elected in January, has demanded a reduction of the harsh austerity measures imposed by Greece's creditors - the European Union, European Central Bank and International Monetary Fund.

The ministers said in a statement that those three institutions believed Greece's new plans were "sufficiently comprehensive to be a valid starting point".

"We therefore agreed to proceed with the national procedures with a view to reaching the final decision on the extension by up to four months," they said.

If the deal is now backed by the eurozone parliaments, all the parties will then have to sit down to the plans and hammer out a full agreement by the end of April, so Athens can meet debt payments falling due through June.

Greek stocks closed up 9.81 per cent amid growing confidence about the bailout.

The reform list unveiled by Athens includes steps to tighten up on tax collection and government spending, especially on the civil service and pensions, and crack down on corruption.

But it keeps measures to offset the pain caused by the tough austerity policies Athens agreed to in the bailout programme, such as free electricity for 300,000 poor families, free access to health care, food and public transport coupons and aid for those on low pensions.