Greek bond yields hit their lowest in more than a year and banking stocks rose about 10 percent after the country's finance minister said Athens had reached an agreement with its lenders on financial reforms. As Sonia Legg reports, it removes a major obstacle holding up bailout loans.
The ugly scenes from last week suggest many Greeks aren't impressed with the promises their government is making to international lenders. But that didn't stop them making some more this week. After days of negotiations they've finally reached an agreement on financial reforms - they'd been holding up further bailout payments. Finance Minister Euclid Tsakalotos. (SOUNDBITE) (Greek) GREEK FINANCE MINISTER, EUCLID TSAKALOTOS, SAYING: "It was a tough negotiation, there was a great deal of pressure due to time constraints concerning the bank recapitalisation. As you can imagine, just like last summer the lever used to pressure us was a possible Grexit." The deal, if ratified by Greece's parliament on Thursday, will mean Athens gets 2 billion euros of aid and 10 billion euros to recapitalise its four main banks It also means the ECB will be able to buy Greek bonds - without its help Greece would again be facing bankruptcy. Even so Athens still has a lot to prove, says CMC Markets' Michael Hewson. (SOUNDBITE) (English) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "I still think there is a case for debt relief but unfortunately that particular problem is more a political problem rather than an economic one. I think if they are going to get debt relief it is not going to be much before March next year simply because we have the small matter of a Spanish election in December," Euro zone ministers will vote on the deal on Friday. And the EU's Economic Commissioner called it a "good day." Greek markets certainly saw it that way - local stocks rose and bond yields hit their lowest in more than a year.