What you need to know about the Greek deal with the eurozone

Greece was thrown a lifeline late last night after eurozone creditors agreed to extend its bailout.

One official said the cash-strapped country’s financial rescue package had been extended by four months, Reuters reported.

The deal gives Greece much-needed breathing space after its banking system risked losing access to lending provided by the European Central Bank, raising the spectre of a Greek exit from the single currency as early as next month.

It also allows its new anti-austerity party, Syriza, to negotiate a longer-term deal with its creditors. Officials said the deal was dependent on Greece explaining in a letter by Monday to the Eurogroup listing all the policy measures it planned for the rest of the bailout period, to ensure conditions were met.

Eurozone finance ministers were meeting in Brussels to decide whether to accept the Athens government’s request earlier this week for a six-month extension of its financial support package.

The German finance ministry initially slapped away Athens’ request, insisting that Greece must first commit to complete the agreed economic reform programme.

The present bailout programme expires next Saturday but the chairman of the Eurogroup, Jeroen Dijsselbloem, said any extension request would need sufficient time to be approved by national parliaments.

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