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Greece reaches deal on austerity

European Union creditors were demanding Greece further cut pensions; lawmakers agreed to a deal after an overnight session.

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Protesters shout slogans during a 24-hour general strike in Athens on February 7, 2012. A general strike gripped Greece in protest against new austerity measures demanded with increasing urgency by the European Union as part of a debt rescue deal with banks. (Aris Messinis/AFP/Getty Images)

Greece today agreed to austerity measures demanded by the "troika" - the European Union, European Central Bank, and International Monetary Fund - after reaching an impasse on Wednesday. The agreement enables Greece to secure an additional 130 billion euro ($172 billion) bailout the country needs to avoid defaulting on its credit.

Greece's parliament spent a marathon overnight session debating the most contentious part of the demands - additional cuts to pensions - that have ignited a fresh wave of protests across the country, Reuters and the Associated Press reported.

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The AP reported that Greece is making progress in other fields. In addition to paving the way for a new EU-backed bailout, the country is "close" to a deal with private investors to reduce the country's borrowing cost. Private investors, called "vultures" by critics, bought Greek debt on the cheap and have demanded high payout.

Reuters reported: "Finance Minister Evangelos Venizelos set off for Brussels without a complete deal after all-night talks with leaders of the three Greek coalition parties and chief EU and IMF inspectors left one sensitive issue - pension cuts - unresolved." But by the morning, a deal had been reached.

The deal averts a default by Greece that could have had dire implications on the global economy.

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http://www.globalpost.com/dispatch/news/regions/europe/120209/greece-reaches-austerity-agreement