European leaders in Brussels have reached a third bailout deal for Greece on Monday morning after more than 17 hours of talks on the thorny subject of reforms and more financial aid for the near-bankrupt country.
Politicians quickly took to social media to break the news of a breakthrough. Belgian Prime Minister Charles Michel tweeted the word "agreement" and the Cyprus government spokesman said "we seem to have deal on Greece."
Bond yields in Italy and Spain fell to session lows after the comments and the euro revers earlier losses to hit the day's high of $1.11725. the pan-European Stoxx 600 index opened 0.8 percent higher.
The president of the European Union, Donald Tusk, also tweeted to confirm the news.
In a press conference Monday, Tusk said "we have an agreekment" and said both sides had agreed in principle "to start negotiations on an (European Stability Mechanism) ESM program, which, in other words, means continued financial support for Greece."
"The decision gives Greece the chance to get back on track with the support of European partners," he added, but said there would be "strict conditions."
Also speaking at the press conference, European Commission President Jean-Claude Juncker said there would be no "Grexit" (a Greek exit from the euro zone) as a result of the deal while the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem said that talks would continue in the week over the details of the bailout.
One part of the agreement, Dijsselbloem added, is that a 50 billion euro "trust" fund will be set up using Greek government assets. The fund will then be used to help pay down the country's debts and refinance its banks. A panel of experts will be recruited in the coming days to decide which assets to be used and how the funds will be monetized - either through privatization or re-investment.
In a radio interview before the press conference, French Prime Minister Manuel Valls said a deal would allow the European Central Bank to act and for Greek banks, which have been operating under capital controls for over a week, could open. However, he told France Inter Radio: "let's be cautious."
Euro zone finance ministers, who also met this weekend, believe a third bailout program for Greece could cost up to 86 billion euros.
Earlier reports suggested there were sticking points over a bailout proposal from Europe on the Greek side, with wariness about the International Monetary Fund's (IMF) renewed involvement with a third bailout. The IMF was part of the first two bailouts but Greece effectively defaulted on a debt repayment to the body last month.
With trust severely damaged between Greece and its European counterparts after months of fraught talks over cost-cutting reforms, euro zone leaders have demanded that Greece pass laws on reforms by Wednesday night, before a financial rescue can take place.
Although the apparent agreement helps to quash fears that Greece could be heading for a euro zone exit there is some skepticism that Greek Prime Minister Alexis Tsipras can get reform measures passed through parliament.
Other reforms that Greece has to pass include an overhaul of Greece's pension system and widespread sales tax rises that could face opposition in the Greek parliament. There are reports that Greek Prime Minister Alexis Tsipras is ready to expel any rebels within his Syriza party that don't back the reforms.
This story is developing. Please check back for further updates.
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