European finance ministers agree to provide 40bn euros to ease Greek's debt crisis after three years of false starts.

Ministers reduced rates on bailout loans, suspended interest payments for 10 years and engineered a Greek bond buyback. The first installment of 34.4bn euros was due in December.

European ministers reduced rates on bailout loans, suspended interest payments for 10 years and engineered a Greek bond buyback. The first installment of 34.4bn euros was due in December.

"I very much welcome the decisions taken by the ministers of finance," European Central Banks president Mario Draghi said. "They will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece."

The market is relieved we have a deal now and the tail risk of a Greek accident has been taken out. Michael Leister, Commerzbank

The International Monetary Fund and European Central Bank approved of the deal and the ECB offered to move profits from its Greek bond holdings back into the rescue programme.

A new day for Greece?

After three meetings this month and a total of more than 24 hours of discussing and negotiating, countries needed to put their money where their mouth is, ING economist Carsten Brzeski said.

The 13-hour meeting ended early today. Greek Prime Minister Antonis Samaras went on national television declaring a "new day" for Greece, but Athens must earn each payout and so far Greece's population has not been anxious to stomach austerity or the further cuts European leaders have demanded in return for the bailout.

Gerald Lyons, Standard Chartered banks' chief economist, said the deal was long overdue: "The most significant thing is that 20 per cent of Greek debt has been written off."

Vote of confidence

The batch of measures will help pare Greece's debt from 190 per cent of gross domestic product in 2014 to 124 per cent of GDP in 2020, a target set by the IMF.

Konstantinos Michalos, president of the Athens chamber of commerce and industry, said the deal was a major vote of confidence in Greece.

European shares climbed on the news and safe-haven German bonds fell after the announcement.

"The market is relieved we have a deal now and the tail risk of a Greek accident has been taken out," said Michael Leister, a senior rate strategist at Commerzbank.