Eurozone leaders have reached an agreement to provide an 86bn euro bailout to keep the near-bankrupt Greece in the single currency.
Greece will receive the money over three years, along with an assurance that eurozone finance ministers will start to discuss ways to bridge the funding gap until the bailout is finally ready.
The bailout money becomes available provided Greek Prime Minister Alexis Tsipras can meet a timetable for enacting unpopular reforms to pensions and VAT, as well as imposing budget cuts and new bankruptcy rules.
The terms imposed by international lenders mean Mr Tsipras must abandon promises to the Greek people of ending austerity, and are likely to cause an outcry at home.
“Clearly the Europe of austerity has won,” said George Katrougalos, Greece’s reform minister.
“Either we are going to accept these draconian measures or it is the sudden death of our economy through the continuation of the close of the banks.
“So it is an agreement that is practically forced upon us,” he told BBC radio.
But European Council President Donald Tusk, who along with German Chancellor Angela Merkel and French President Francois Hollande attended the conclusive final meeting with Mr Tsipras, said: “The decision gives Greece the chance to get back on track with the support of European partners.”
That view was endorsed by Chancellor Merkel, who said: “Greece has a chance to return to the path of growth.”
European Commission President Jean-Claude Juncker told a news conference he did not think the Greek people had been humiliated — “It is a typical European arrangement.”
Mr Tsipras now faces the task of persuading his compatriots – who eight days ago rejected bailout terms then on the table from the European Central Bank, the International Monetary Fund, and the European Commission – that he has achieved an acceptable deal.
Greece has a chance to return to the path of growth. Angela Merkel, German chancellor
He has to push the package through the Greek parliament in three days. People close to the government have suggested that he may have to sack ministers who did not support him during the negotiations and make dissident Syriza MPs resign their seats.
And even if this week’s rescue succeeds, some EU diplomats question whether an unstable Greece will stay the course on a programme that is due to last for three years.