After several rounds of intense negotiations, Europe's finance ministers reached an agreement Friday to extend Greece's rescue loans for an additional four months, temporarily relieving fears of the country's possible exit from the eurozone.
The in-principle deal was made a week before Greece's 240 billion euro ($273.2 million) rescue program was set to expire, and buys Athens four more months — rather than the original six it had originally requested — to make necessary fiscal reforms and negotiate new terms for longer-term debt relief.
"Today we established the basis for an agreement that stabilizes the situation," Yanis Varoufakis, Greece's finance minister, told reporters after the 19-nation Eurogroup meeting. "We have not solved the problem of the fiscal gap, but this is the first step. I didn't suggest we solved everything. First we need to stabilize the situation and refine the relations between us, the Greek authorities, and our partners."
As part of the agreement, Greece has agreed to a list of unspecified concessions, and has promised to draft an initial list of reform measures over the weekend which it will present to its creditors Monday, Varoufakis said.
European Central Bank (ECB), International Monetary Fund (IMF), and European Commission (EC) representatives will immediately review the proposal and report back to the broader eurozone. If the financiers are satisfied, the agreement will be ratified, but if the reforms are shot down, the "agreement is dead and buried," Varoufakis said.
The EU/IMF bailout is due to expire on February 28. But the Greek finance minister expressed confidence that his government would be able to draw up a list of reforms that is both agreeable to the European institutions, and satisfies Greek investors, the government, and public.
"Nobody is going to ask us to impose upon our economy and society measures that we don't agree with," Varoufakis said.
"The weekend will be one of joy and creativity," he added. "We are writing our own reforms."
Jeroen Dijsselbloem, the eurozone's president, said Friday's deal had helped Greece and the zone establish "common ground again," and that it was the "first step to rebuilding trust" between the parties.
"Trust leaves quicker than it comes," he said.
Meanwhile, news of the deal helped ease investors concerns and sent equity markets soaring to new heights, with both the Dow Jones and S&P 500 indexes closing at a record highs Friday night, while the euro also gained against the dollar.
The deal was forged with a certain level of comprise on both sides, not least from Greece's new radical left-wing Prime Minister Alexis Tsipras who had vowed to roll back austerity, which has left the country in financial tatters, and exit the euro if the zone did not back down from its spending cut requirements.
Since the crisis began in 2008, Greece's gross domestic product has shrunk by a quarter. More than a quarter of the population is jobless, while youth unemployment has reached 60 percent.
The lion's share of the country's bailout cash has simply paid for debt service on its previous loans, so the government has been unable to make substantial investments in economic growth.
VICE News' Liz Fields contributed reporting to this article.