Deal on Greek austerity cuts

Greece has reached a tentative agreement on new austerity cuts demanded by creditors to release a €130 billion (£109 bn) bailout, hours before a crucial meeting of finance ministers in Brussels.

Prime minister Lucas Papademos’ office said the agreement with the majority Socialists and the Conservatives will allow alternative cuts to those rejected earlier during a marathon meeting of the three coalition party leaders.

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No details were available on what alternative measures would be chosen. Mario Draghi, the president of the European Central Bank (ECB), confirmed the latest stage in the austerity talks, telling reporters at a press conference in Frankfurt, Germany, that the Greek party leaders had accepted the terms of the agreement.

The ECB is involved in the debt talks along with the European Union and the International Monetary Fund – known as the “troika”.

Originally party leaders had resisted new pension cuts, although others were approved.