Greece has secured a four-month extension of its financial rescue after its euro zone partners approved a reform plan that backed down on key leftist measures and promised spending to alleviate social distress would not derail its budget.
Finance ministers sealed the decision in a one-hour telephone conference convened by Eurogroup chairman Jeroen Dijsselbloem after the new leftist-led Athens government sent him a detailed list of reforms it plans to implement by July.
The ministers reviewed a six-page document signed by Marxist Finance Minister Yanis Varoufakis that watered down campaign promises to halt privatisations, boost welfare spending and raise the minimum wage, vowing to consult partners before key reforms and to keep them budget-neutral.
Both the European Commission and the International Monetary Fund called the Greek letter "sufficiently comprehensive to be a valid starting point for a successful conclusion of the review".
In a statement, the 19-nation Eurogroup urged Greece to develop and broaden the list of reform measures, based on "the current arrangement" - a euphemism for the bailout agreement which leftist Prime Minister Alexis Tsipras had vowed to scrap.
In a foretaste of tough negotiations to come, IMF Managing Director Christine Lagarde said the reform plan was "not very specific" and much clearer assurances would be needed on key reforms of pensions, taxation and privatisation.
And Slovak Finance Minister Peter Kazimir, reflecting deep scepticism among northern European fiscal hawks, said: "Greeks have lots of heavy lifting to do until end-April. We all want to see numbers now."
Financial markets surged even before confirmation of the extension of the 240 billion euro EU/IMF bailout, saving Greece for now from an imminent banking collapse, state bankruptcy and a possible disorderly exit from the euro zone.
The country's longer-term financial future remains uncertain with Mr Dijsselbloem telling the European Parliament the euro zone's most heavily indebted member is likely to need further assistance after two bailouts since 2010.
The Greek letter pledged not to reverse ongoing or completed privatisations, and to ensure the fight against what the government calls the humanitarian crisis caused by austerity "has no negative fiscal effects".
The six-page document contained few figures but promised to improve tax enforcement, fight corruption and "review and control spending in every area of government spending".
Mr Dijsselbloem, who is also Dutch finance minister, told the European Parliament Athens was likely to need a further aid programme when the four months expires, saying: "I think we need to consider further support for Greece."
The euro zone could consider further debt relief measures if Athens met all the criteria specified in its November 2012 second bailout, "which hasn't happened yet", he said.
He insisted a Greek exit from the euro zone had not been discussed and was not on the table, adding that the only government to have held a meeting to prepare for a possible "Grexit" was in non-euro Britain.
In EU paymaster Germany, Finance Minister Wolfgang Schaeuble, who took the toughest line in the Greek negotiations, wrote to the speaker of the lower house of parliament requesting a vote this week on extending the bailout.
Germany's rejection of an initial Greek request for a six-month loan extension forced Athens into a string of politically sensitive concessions, postponing or backing away from campaign promises to reverse austerity, scrap the bailout and end cooperation with the "troika" of EU, ECB and IMF inspectors.
The letter said Greece would phase in collective bargaining with a view to raising minimum wages "over time" but promised that any changes would be agreed with its partners.
While Mr Tsipras has won broad support in his coalition for the deal clinched in Brussels, some hardline leftists have criticised it and the conservative opposition has charged that his illusions have been punctured.
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