Greece faces tough conditions under deal with euro zone

Just hours after the deal was settled in marathon all-night talks, doubts were already emerging about whether leftwing Prime Minister Alexis Tsipras would be able to hold his government together long enough to implement any bailout.

The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Tsipras to abandon promises of ending austerity and could fracture his government and cause an outcry in Greece.

"Clearly the Europe of austerity has won," Greece's Reform Minister George Katrougalos said.

"Either we are going to accept these draconian measures or it is the sudden death of our economy through the continuation of the closure of the banks. So it is an agreement that is practically forced upon us," he told BBC radio.

If the summit on Greece's third bailout had failed, Athens would have been staring into an economic abyss with its banks on the brink of collapse and the prospect of having to print a parallel currency and exit the euro.

"The agreement was laborious, but it has been concluded. There is no Grexit," European Commission President Jean-Claude Juncker told a news conference after 17 hours of bargaining.

He dismissed suggestions that Tsipras had been humiliated even though the summit statement insisted repeatedly that Greece must now subject much of its public policy to prior agreement by bailout monitors.

"In this compromise, there are no winners and no losers," Juncker said. "I don't think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement."

Tsipras himself, elected five months ago to end five years of suffocating austerity, said he had "fought a tough battle" and "averted the plan for financial strangulation".

But to get the accord through parliament by the deadline on Wednesday, Tsipras will have to rely on votes from pro-European opposition parties, raising big question marks over the future of his government and opening the prospect of snap elections.

Leftwing rebels in the ruling Syriza party and his junior coalition partner, the right-wing Independent Greeks party, indicated they would not tear up election pledges that brought them to power in January.

"We cannot agree to that," Independent Greeks leader Panos Kammenos told reporters after meeting Tsipras. "In a parliamentary democracy there are rules and we uphold them."

CONDITIONAL AGREEMENT

Greece won conditional agreement to receive a possible 86 billion euros ($95 billion) over three years. As part of the deal, euro zone finance ministers will discuss on Monday how to keep Greece financed during the time it will need to agree a bailout, but none of the options appear easy, officials said.

Athens must meet a tight timetable for enacting unpopular reforms of value added tax, pensions, budget cuts, bankruptcy rules and an EU banking law that could be used to make big depositors take losses.

German Chancellor Angela Merkel said she could recommend "with full confidence" that the Bundestag authorize the opening of loan negotiations once the Greek parliament has approved the entire program and passed the first laws.

The Bundestag is due to vote on Greece on Friday.

Merkel's allies meanwhile defended the deal, with her chief of staff, Peter Altmaier, saying Europe had won and Germany "was part of the solution -- from the beginning until the end!"

But in Greece, relief was mixed with anger at Germany. "Listen, it is some sort of victory but it is a pyrrhic victory because the measures are very strict," Marianna, 73, told Reuters.