ATHENS, Nov 27: The eurozone and IMF threw a new lifeline to Greece on Tuesday, releasing funds to avert bankruptcy and admitting that help to reduce debt will be needed for years, leading the Greek prime minister to herald a new dawn for his country.The deal struck in the early hours marks a “new day” for Greece, Prime Minister Antonis Samaras said after 13 hours of landmark negotiations in Brussels.

On financial markets, the euro firmed and shares rose in relief at the new breathing space for Greece.

This came in the form of approval for the latest slice of rescue funding to pay current bills, already agreed but tied to a new round of deep budget measures, and a new look at the huge mountain of accumulated debt, with the IMF giving ground.

“Everything has gone well,” Samaras said in a message to the Greek people who have been reeling from the devastating effects of their debt crisis, recession, and the effort needed to restructure their economy.

“All Greeks have fought (for this decision) and tomorrow is a new day for every Greek person.” European Central Bank President Mario Draghi said that Greece must still meet a series of agreed conditions, but “the decision will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece.”

Eurozone finance ministers agreed in principle to transfer, in December, 43.7 billion euros ($57 billion) so that the country does not default at around the end of the year.

They also adopted a new arrangement with the International Monetary Fund, a party to eurozone bailout packages, to slice more than 40 billion euros by 2020 from the debt owed by Greece.

German Finance Minister Wolfgang Schaeuble said the package would be presented to German lawmakers by the end of the week.

The techniques to reduce Greece's debt will begin with a buyback by Greece of old debt that has fallen in value on commercial money markets. National central banks across the eurozone will forego profits on holdings of Greek debt which has slumped in value.

Interest rates due to eurozone creditors will also be trimmed or deferred -- Ireland and Portugal can now be expected to demand parity -- while maturity dates will be pushed back by years.

The IMF is pushing for a so-called “haircut” or write-down of debt by eurozone partner governments in the way banks wrote off most of the loans due to them earlier this year, but Germany is against this ahead of a general election next year.

But other Triple A-rated states have said they would “not exclude” the possibility of a write-down of debt from 2015 onwards.

The IMF in particular was held back by one of its principles that it should not lend if there is no medium-term prospect of debt falling to sustainable levels, but the problem of who will eventually carry the cost of the debt is a problem for the entire eurozone.

French President Francois Hollande declared the outcome to be the “positive result of a line taken by France for the last six months.” A statement from the president's office in Paris said: “This agreement concludes several weeks of negotiations and the vote by Greece on several difficult and courageous reforms.”

In London, the senior economist at Berenberg bank, Christian Schulz, commented that the deal meant that Greece had obtained an extra two years to achieve the target of balancing its budget, before allowing for interest payments.

But, he noted, both the eurozone and the IMF wanted to see the results of a scheme for buying back Greek bonds before giving final approval, probably on December 13, and also eurozone countries had to approve the details at national level, and this might include a vote in the German parliament.

He noted: “The IMF compromised on its position that Greece needs to reduce public debt to 120 per cent of GDP (gross domestic product) by 2020 and raised that target to 124 per cent in 2020 but to 110 per cent in 2022.” The issue of the bond buyback “leaves some uncertainty over the deal,” he warned.

The meeting in Brussels agreed that the latest funds would be paid in four installments from December 13 until the end of March, conditional on Greece paying creditors and enacting tax reforms.

IMF head Christine Lagarde said: “The IMF wanted to make sure the euro partners would take the necessary actions to bring Greece's debt on a sustainable path”. She added: “I can say today that it has been achieved.”—AFP