European leaders agree tough Greek bailout deal

Brussels

Eurozone leaders struck a deal today on a bailout to prevent debt-stricken Greece from crashing out of the euro, forcing Athens to push through draconian reforms in a matter of days.

After gruelling 17-hour talks during which the future of European integration hung in the balance, leftist Greek Prime Minister Alexis Tsipras accepted terms set by his distrustful partners.

The deal requires Greek parliament to approve a raft of market-oriented laws by Wednesday as a sign of good faith and face scrutiny by the International Monetary Fund (IMF) for compliance.

Only then will the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros ($96 billion), its third rescue programme in five years.

"EuroSummit has unanimously reached agreement," EU President Donald Tusk said.

"All ready to go for ESM (the eurozone's bailout fund, the European Stability Mechanism) programme for Greece with serious reforms and financial support."

The last-ditch deal is aimed at keeping Greece's economy afloat amid fears its cash-starved banks were about to finally run dry and trigger its exit from the single currency.

"Grexit has gone," European Commission President Jean-Claude Juncker told AFP after the talks, ruling out the threat of a departure from the euro which could have potentially destabilised the global economy.