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Greece wins eurozone bailout deal with strict conditions

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Europe on Friday granted Greece a crucial extension to its massive debt bailout, ending weeks of tension, but at the cost of huge concessions including a commitment to spell out reforms within two days.

[BRUSSELS] Europe on Friday granted Greece a crucial extension to its massive debt bailout, ending weeks of tension, but at the cost of huge concessions including a commitment to spell out reforms within two days.

The 19 single currency finance ministers reached the hard-won deal to end a standoff pitting Greece against an angry Germany, suspicious that the radical leftist government in Athens was looking to ditch its austerity obligations.

"The meeting was intense because it was about building trust between us," said Eurogroup head Jeroen Dijsselbloem, after the talks ended with a two page statement setting out the tough conditions Athens will have to fulfil.

In exchange for the four-month extension, Greece agreed it would submit a list of economic and other reforms by Monday which its eurozone partners will then review to see if they go far enough.

On Tuesday, they will report back to Greece and decide whether to proceed with Friday's agreement.

Greek Finance Minister Yanis Varoufakis said the deal would mark a new era for Athens and its relationship with the European Union.

"Today was a pivotal moment because Greece for five years now has been lonely, isolated in the Eurogroup. Today that isolation has broken," Mr Varoufakis said.

Markets reacted positively to the deal, with the Dow and S&P 500 surging to fresh records on Wall Street.

The effort to agree a deal torpedoed two earlier Eurogroup meetings, with deep divisions emerging between Greece and its eurozone partners over the conditions of extending the bailout.

Greece formally requested a six-month loan extension on Thursday, offering concessions including a return - if not in name - of the hated "troika" of creditors that had audited the Greek economy in the last years during the bailout.

"Four months is the appropriate delay in terms of financing and future challenges," Mr Dijsselbloem said.

Mr Dijsselbloem worked overtime Friday to get the make-or-break deal as Germany insisted Greece stick with the austerity commitments included in its bailout programme.

The fraught discussions focused on a new package of concessions beyond those contained in the Greek request submitted Thursday.

MERKEL, HOLLANDE URGE ACCORD

Up to the very end, the deal with Greece seemed fragile, with its possible exit of Greece from the eurozone an increasing risk.

Hardline German Finance Minister Wolfgang Schaeuble on Thursday rejected the Greek extension request out of hand but a lengthy phone call between Greek Prime Minister Alexis Traship and German Chancellor Angela Merkel appeared to get the talks back on track.

Meeting in Paris Friday with French President Francois Hollande, Dr Merkel said the German position "since the beginning of the Greek programme" had been that Greece remain in the euro.

Berlin "would do everything to continue along this path," she said.

Mr Hollande said: "Greece is in the eurozone. Greece has to stay in the eurozone." Time was pressing to find a solution before the current bailout programme ends for fear that failure could see Greece run out of money and be forced out of the eurozone within weeks.

European officials said the stand-off had come down to a clash of personalities with Schaeuble furious at the negotiating style of the casual Varoufakis, who remained markedly sombre on Friday.

The issues go beyond that, however, and echo a divisive debate in the European Union whether the austerity policies adopted to cope with the debt crisis have done more harm than good.

For Germany, fiscal discipline and tight spending controls are the only basis for the sustainable growth needed to deliver much-needed jobs.

It will be now up to the Tsipras government to persuade austerity weary Greeks that an electoral promise to end austerity has been kept.

AFP