BRUSSELS — Finance ministers of the 19-nation euro single currency group on Friday approved the first $29 billion of a vast new bailout package to help rebuild Greece's shattered economy.
The approval came after Greece's Parliament passed a slew of painful reforms and spending cuts after a marathon overnight session that divided the governing party, raising the specter of early elections.
"Of course there were differences but we have managed to solve the last issues," Eurogroup chairman Jeroen Djisselbloem told reporters in Brussels. "All the intense work of the past week has paid off."
About $11 billion will be available to recapitalize Greece banks, while an additional $18 billion will be paid in installments, starting with $14.4 billion by Thursday when Greece must make a new debt payment to the European Central Bank.
"On this basis, Greece is and will irreversibly remain a member of the euro area," said European Commission President Jean-Claude Juncker after the deal was sealed.
The final rescue package would eventually give Greece up to $93 billion in loans over three years in exchange for harsh spending cuts and tax hikes. The deal must still be approved by some national parliaments, including Germany, but that is largely considered to be a formality. Some nations, such as Finland, have already given their approval.
The move saves Greece from a disorderly default on its debts, which could have come as soon as next week, and helps end months of uncertainty that has shaken world markets, but it means more hardship for ordinary Greeks.