European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts an austerity plan finalized in fraught last-minute talks with international lenders.
Greek Prime Minister George Papandreou promised to push through radical economic reform after his new finance minister clinched agreement with EU and IMF inspectors on extra tax rises and spending cuts to plug a 3.8 billion euro funding gap.
"A comprehensive reform package... and adoption by the Greek parliament of the key laws on the fiscal strategy and privatization must be finalized as a matter of urgency in the coming days," EU leaders said in a summit statement.
"This will provide the basis for setting up the main parameters of a new program jointly supported by its euro area partners and the IMF and allow disbursement in time to meet Greece's financing needs in July," the 27 leaders said.
The euro rebounded against the dollar and U.S. stocks pared losses on news of the agreement in Athens.
Greece needs 12 billion euros in European and IMF aid to avoid a default on its debt mountain in mid-July that could spread contagion across the euro currency area and send shock waves around the world economy.
"Greece is committed, strongly committed, to continue a very important program for major changes, radical changes, to make our economy viable," Papandreou told reporters.
The EU leaders also exhorted conservative Greek opposition leader Antonis Samaras to rally behind the austerity program, but he stuck to his refusal to vote for the entire plan, saying he would support the spending cuts but not tax increases.
German Chancellor Angela Merkel, who has taken perhaps the toughest line on Greece, urged the Greek opposition to do what was necessary and get behind the package. "In such a situation, everyone must stand together in a country," she said.
Euro zone governments are meanwhile talking to banks and insurance companies to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a second rescue package for Athens.
