Eurozone reaches deal for third Greek bail-out - Telegraph.co.uk

Athens now has to bring its debt-to-GDP ratio down to 124pc by 2020, rather than the 120pc target. However, its lenders stopped short of writing down its debt, which the IMF had favoured.

None the less, the deal was seen as a change in tack from six months ago, when Europe's leaders seemed ready to let Greece exit the eurozone.

The deal saw yields on Greek and other peripheral eurozone countries' debt slip. Portugal saw the biggest improvement on its 10-year bonds as the yields neared 7.85pc, down from above 8pc on Monday.

However analysts cautioned that the commitments from the euro group were conditional and some national parliaments would still need to ratify them.

"The euro group provided the expected fudge to keep Greece in the eurozone," said Carsten Brzeski, an economist at ING Bank. "It is obvious that even the euro group does not expect that this was the last word on Greece."

Citi analysts still expect Greece to exit the eurozone in the next 12 to 18 months. The troika has twice before bailed out Greece, pledging a total of €240bn in rescue loans.