7:05am

Thu February 9, 2012
The Two-Way

Greek Government Reaches Austerity Deal That's Key To Bailout Payment

European Central Bank President Mario Draghi says he's been told by GreekPrime Minister Lucas Papademos that a deal has been reached on new austerity measures that Eurozone finance ministers have been seeking from Greece before it gets a crucial $173 billion bailout, The Financial Times is reporting.

The Associated Press reports that "a spokeswoman for the prime minister's office says the agreement with the majority Socialists and the conservatives will allow alternative cuts to those rejected early Thursday during a meeting of the three coalition party leaders. She spoke on customary condition of anonymity."

One of the sticking points to an agreement had been a demand from creditors that Greece make nearly $400 billion worth of pension cuts. It's not known just yet how Greek lawmakers resolved that issue.

Previous austerity measures in Greece over the past year have sparked some riots.

Planet Money has previously explored "what's wrong with Europe" and why the financial crisis there matters to the U.S.

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