Italy was put under considerable pressure from European leaders to come up with credible ideas to reign in its enormous debt and get the economy growing again.
In the days before the summit, fraught discussions in Rome ended with proposals for labour reforms, and a plan to raise cash by selling off state-owned buildings.
Prime Minister Silvio Berlusconi said: ‘In the final decision there has been the recognition of our ambitious projects which now need to be achieved. And naturally we gave the dates by which we have to achieve each measure.’
The Prime Minister of Greece, whose debt mountain has been the main focus of worries over the euro zone recently, said the agreement was historic.
George Papandreou said: ‘We managed to escape this default trap. The fact that we are still here today is a big achievement for the Greek people. So, today I think we can close a chapter, a chapter of the past and I think we can now start to start working on a new future for our country with all our strength.’
It is not all over yet for Greece though. The bailout demands even more ambitious reforms in a country already hit by violent protests over the existing austerity measures.