An agreement reached in the early hours of Tuesday after marathon talks between eurozone finance ministers on a second Greek bailout package was “important for everyone”, according to Finance Minister Tonio Fenech.

Reacting to the deal clinched at 5 a.m., Mr Fenech said an important condition, that Greek political parties sign up to the agreement, was met.

Greece goes to the polls in April and fears were growing among eurozone member states that a change in administration could have destabilised any agreement reached now. Mr Fenech said parallel talks were also held with private sector operators to accept a 53 per cent haircut – three percentage points more than agreed last year – in the value of Greek government bonds they hold.

The haircut is expected to shave off some €100 billion from Greece’s debt mountain of €310 billion.

The bailout package, Mr Fenech said during a video conference from Brussels, also included more oversight by eurozone experts of Greece’s economic management.

Greece will have to reduce its debt to 120 per cent of GDP from 160 per cent by 2020 and the Greek government has to come up with additional spending cuts in the coming days.

ksansone@timesofmalta.com