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Greek bailout talks make major breakthrough on reforms

Greek pensioners protest further pension cuts

The compromise allows Greece's creditors to conclude a review of the country's finances, and unlock the second tranche of a bailout deal agreed in June 2015.

Eurozone finance ministers will discuss the state of Greek negotiations on Friday (7 April) at an informal meeting in Malta, but officials said a full deal there was unlikely.

Upon leaving the meetings that stretched into late Tuesday, Eurogroup chief Jeroen Dijsselbloem tweeted "good progress" and said the talks would continue on Wednesday.

Without more bailout cash, Greece would struggle to make a debt payment in July, raising anew the prospect of default.

Nonetheless, the latest breakthrough has officials eyeing a formal deal by late May, when eurozone finance ministers gather for the next Eurogroup meeting in Brussels.

On the basis of this, there will be a decision on whether Greece remains on track to meet its targets and whether the measures scheduled for 2020 have to be moved forward to 2019.

Pierre Moscovici, European Commissioner for economic affairs, said the agreement had been reached after "several months of hard negotiations", with a breakthrough made this week.

Greece has been bailed out three times since 2010.

Greece has depended on worldwide bailouts since 2010 after it was unable to borrow on global bond markets.

The EU-Turkish deal is the reason why refugee flows have been minimized and deaths in the Aegean are nearly non-existent, Greek Prime Minister Alexis Tsipras said on Wednesday.

But European governments, with Germany foremost among them, have resisted debt relief and disagree with the Fund's position, calling instead for pension reforms, tax hikes and privatisation.

"Greece cannot stand these games for much longer", Mr. Tsipras said, adding that he had already asked Mr. Tusk for an extraordinary European Union summit that could take place even next week. This agreement would then need the political backing of eurozone ministers, before Greece could get further loans.

"An agreement on policies will have to be followed by discussions with euro area countries to ensure satisfactory assurances on a credible strategy to restore debt sustainability, before a program is presented to the IMF Executive Board", IMF spokesman Gerry Rice said.

Among the measures reportedly demanded by the creditors are additional pension cuts, a reduced tax-exemption ceiling, and further deregulation of the energy and labour markets.

The Europeans have been at loggerheads with the International Monetary Fund (IMF) over the Washington-based lender's demands for more realistic budget targets and firm commitments to reduce Greece's mountain of debt.