Greece reached a deal with its European creditors Monday, pledging stringent austerity to avoid an exit from the euro and the global financial chaos that could have followed.
The deal calls for Greeks, already reeling from harsh measures and economic decline, to cut back even further in exchange for more loans without which its financial system would surely collapse. The deal, which still needs approval from Greece's parliament, will be the country's third bailout in five years.
To get to a deal, Greek Prime Minister Alexis Tsipras had to overcome the fundamental mistrust of many of his allies among the 18 other countries that use the euro, known as the euro-zone. Just a week earlier, at his urging, Greeks had voted in a referendum to reject many of the measures he agreed to Monday, and the deal forced him to renege on many of his election promises.
Both sides acknowledged the bitter disputes that kept the leaders at odds for months, and kept them negotiating nine hours past a Sunday midnight deadline. German Chancellor Angela Merkel said that along with the deal, "trust needs to be rebuilt."
French President Francois Hollande said it was a path well worth taking. He said the Greek parliament would convene within hours to adopt the reforms called for in the plan, and he celebrated Greece's continued membership in the euro. For the euro-zone to have lost Greece, Hollande said, would have been to lose "the heart of our civilization."
Tsipras had been holding out for a better deal to sell to his reluctant legislature in Athens this week, even as financial collapse grew closer by the day.
A breakthrough came in a meeting between Tsipras, Hollande, Merkel and European Union President Donald Tusk, after the threat of expulsion from the euro put intense pressure on Tsipras to swallow politically unpalatable austerity measures.
