Greece secured a four-month extension of its financial rescue today when its eurozone partners approved a reform plan.
The plan backed down on key leftist measures and promised that 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.
It came after the new leftist-led Athens government sent him a detailed list of reforms it plans to implement by July.
"Following Eurogroup teleconference decision, national procedures for extension of the Greek programme can begin," Valdis Dombrovskis, the European Commission vice-president for the euro, said on Twitter.
List of #Greece reform measures deemed sufficiently comprehensive to be a valid starting point for the successful conclusion of the review
— Valdis Dombrovskis (@VDombrovskis) February 24, 2015The ministers reviewed a document signed by Greek Finance Minister Yanis Varoufakis that watered down campaign promises to halt privatisations, boost welfare spending and raise the minimum wage.
It also vowed 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 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 haws, said: "Greek 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 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 eurozone's most heavily indebted member is likely to need further assistance after two bailouts since 2010.
