Greek Prime Minister Alexis Tsipras speaks with the media after a meeting of eurozone heads of state at the EU Council building in Brussels on Monday. A summit of eurozone leaders reached a tentative agreement with Greece on Monday for a bailout program that includes "serious reforms" and aid, removing an immediate threat that Greece could collapse financially and leave the euro. Photo: AP

Eurozone leaders made Greece surrender much of its sovereignty to outside supervision on Monday in return for agreeing to talks on an 86 billion euro ($94.8 billion) bailout to keep the near-bankrupt country in the single currency.

The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged leftist Prime Minister Alexis Tsipras to abandon promises of ending austerity and could fracture his government and cause an outcry in Greece.

CNN reported that people in Athens are ready to rally against the bailout plan.

"Clearly the Europe of austerity has won," Greece's Reform Minister George Katrougalos said.

If the summit had failed, Greece would have been staring into an economic abyss with its shuttered banks on the brink of collapse and the prospect of having to print a parallel currency and in time, exit the European monetary union.

"The agreement was laborious, but it has been concluded. There is no Grexit," European Commission President Jean-Claude Juncker told a news conference after 17 hours of bargaining.

He dismissed suggestions that Tsipras had been humiliated even though the final Euro summit statement insisted that Greece must henceforth subject much of its public policy to prior agreement by bailout monitors.

"In this compromise, there are no winners and no losers," Juncker said. "I don't think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement."

Tsipras himself, elected five months ago to end five years of suffocating austerity, said he and his team had "fought a tough battle" and had to make difficult decisions. He said he had secured an improved promise of debt restructuring and "averted the plan for financial strangulation."

Greece won conditional agreement to receive a possible 86 billion euros over three years, along with an assurance that eurozone finance ministers would start within hours discussing ways to bridge a funding gap until a bailout - subject to parliamentary approvals - is finally ready.

That will only happen if he can meet a tight timetable for enacting unpopular reforms of value added tax, pensions, quasi-automatic budget cuts if Greece misses fiscal targets, new bankruptcy rules and an EU banking law that could be used to make big depositors take losses.

German Chancellor Angela Merkel said she could recommend "with full confidence" that the Bundestag authorize the opening of loan negotiations with Athens once the Greek parliament has approved the program and passed the first laws by the Wednesday deadline.

Counting the cost

One senior EU official calculated the cost to the Greek state of the last two weeks of political and economic turmoil at 25 to 30 billion euros. A eurozone diplomat said the full damage might be closer to 50 billion euros.

Tsipras accepted a compromise on German-led demands for the sequestration of Greek state assets worth 50 billion euros in a trust fund beyond government reach, to be sold off primarily to pay down debt. In a gesture to Greece, some 12.5 billion euros of the proceeds would go to investment in Greece, Merkel said.

The Greek leader had to drop his opposition to a full role for the International Monetary Fund in the next bailout, which Merkel had insisted on to win parliamentary backing in Berlin.

In a sign of how hard it may be for Tsipras to convince his own Syriza party to accept the deal, Labor Minister Panos Skourletis said the terms were unviable and would lead to new elections this year.

Six sweeping measures, including spending cuts, tax hikes and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, the leaders decided.

In almost the only concession after imposing its tough terms on Tsipras, Germany dropped a proposal to make Greece take a "time-out" from the eurozone that many believe resembled a forced ejection if it failed to meet the conditions.

Tsipras was subjected to a 17-hour browbeating by leaders furious that he had spurned their previous bailout offer on more favorable terms in June and held a referendum last week to reject it. Only France and Italy worked to try to soften the terms being imposed on Greece.

Mounting opposition

Merkel, whose country is the biggest contributor to eurozone bailouts, said from the start that she would drive a hard bargain against a backdrop of mounting opposition at home to more aid for Greece.

If Greece meets the conditions, the German parliament would meet on Thursday to mandate Merkel and Finance Minister Wolfgang Schaeuble to open the talks on a new loan. Then Eurogroup finance ministers could formally launch the negotiations.

Perhaps the toughest condition for Tsipras to swallow was Germany's insistence that Greek state assets worth up to 50 billion euros be placed in a trust fund beyond government reach.

For his part, Tsipras demanded a stronger commitment by the creditors to restructure Greek debt to make it sustainable in the medium-term. That could be his only hope of selling such a deeply unpalatable package to his own supporters and the Greek public.