Greek Prime Minister George Papandreou has won a deal from European leaders and the IMF for a second financial bailout but must now convince lawmakers to agree to tough austerity measures to secure the funds.
Mr. Papandreou said the new bailout was similar in size to the first rescue package of $160-billion, which is being delivered in slices contingent on Athens passing deep economic reforms.
European Union leaders said Friday they had reached an agreement with Greece on the economic and fiscal reforms that will help the embattled country avoid bankruptcy.
The European Commission in a statement said the commission, the International Monetary Fund, the European Central Bank and Greek authorities had reached a satisfactory agreement on a set of measures to close the fiscal gap for the years 2011-2014.
EU leaders and Greece's creditors said the deal needs to be translated into concrete legislative measures by the end of June, before they pay the next installment of loans, worth $17 billion, from last year's promised $160-billion in bailout funds.
European Commission President Jose Manuel Barroso said privatization and fiscal consolidation are indispensable for Greece. He also called for measures to stimulate jobs and growth in the country.
Greece's new finance minister, Evangelos Venizelos, met Thursday with inspectors from the commission, the European Central Bank and IMF to discuss the austerity bill, which must be passed by parliament next week if the country is to receive the money.
The reforms will include cuts in social benefits and the privatization of state-owned enterprises.
Greek unions on Thursday called for a two-day general strike next week against the $40-billion austerity package, the latest in sometimes violent protest actions against the tough reform measures.
Mr. Papandreou's government won a crucial confidence vote in parliament Wednesday.
The same day, U.S. Federal Reserve Chairman Ben Bernanke said much more than the future of Greece is at stake, adding that failure to resolve the debt crisis in Greece could threaten the global financial system.
