Greek faces tough conditions under deal with euro zone

Greek Prime Minister Alexis Tsipras arrives in his car at a euro zone leaders summit in Brussels, Belgium, in this July 12, 2015 file photo. [Photo/Agencies]

BRUSSELS/ATHENS - Euro zone leaders made Greece surrender much of its sovereignty to outside supervision on Monday in return for agreeing to talks on an 86 billion euro bailout to keep the near-bankrupt country in the single currency.

Just hours after the deal was settled in marathon all-night talks, doubts were already emerging about whether leftwing Prime Minister Alexis Tsipras would be able to hold his government together long enough to implement any bailout.

The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Tsipras to abandon promises of ending austerity and could fracture his government and cause an outcry in Greece.

"Clearly the Europe of austerity has won," Greece's Reform Minister George Katrougalos said.

"Either we are going to accept these draconian measures or it is the sudden death of our economy through the continuation of the closure of the banks. So it is an agreement that is practically forced upon us," he told BBC radio.

If the summit on Greece's third bailout had failed, Athens would have been staring into an economic abyss with its banks on the brink of collapse and the prospect of having to print a parallel currency and exit the euro.

"The agreement was laborious, but it has been concluded. There is no Grexit," European Commission President Jean-Claude Juncker told a news conference after 17 hours of bargaining.