Greece will receive a third bailout after marathon talks in Brussels where eurozone leaders have reached the agreement.
EU chairman Donald Tusk has announced leaders agreed “in principle” on negotiations for the bailout, “which in other words means continued support for Greece”.
Greece’s PM Alexis Tsipras said that after a “tough battle”, his country had secured a “growth package” of €35 billion, and won debt restructuring.
The country will now have to pass reforms demanded by the eurozone by July 15.
“There will not be a <<Grexit>>,” said European Commission head Jean-Claude Juncker, referring to the widespread fear that if there had been no deal, Greece would have had to leave the eurozone.
Alexis Tsipras also said he had the “belief and the hope that… the possibility of <<Grexit>> is in the past”.
“The deal is difficult but we averted the pursuit to move state assets abroad,” he said.
“We averted the plan for a financial strangulation and for the collapse of the banking system.”
Jeroen Dijsselbloem, the head of the eurozone group of finance ministers, said the agreement included a €50 billion Greece-based fund that will privatize or manage Greek assets. Out of that €50 billion, €25 billion would be used to recapitalize Greek banks, he said.
Greek banks have been closed for two weeks, with withdrawals at cash machines limited to €60 per day. The economy has been put under increasing strain, with some businesses closing and other struggling to pay suppliers.
Eurozone finance ministers are due to meet later on Monday to discuss providing “bridge financing” that would cover Greece’s short-term needs.
Parliaments in several eurozone states have to approve any new bailout.
“The road will be long, and judging by the negotiations tonight, difficult,” German Chancellor Angela Merkel said on July 13.
French President Francois Hollande said the agreement had allowed Europe to “preserve integrity and solidarity”.
“We also had to show that Europe is capable of solving a crisis that has menaced the eurozone for several years,” he said.
Eurozone leaders had been meeting in Brussels for 17 hours, with talks continuing through the night.
During the talks, reports emerged that Greece was holding out over the proposed role of the International Monetary Fund (IMF) in a new program, and over the fund to hold Greek assets.