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Greece and creditors arrive to agreement: new package of reforms

Finance minister Euclid Tsakalotos announced Saturday that Greece will have to vote on at least two major bills by January 22 to implement the agreement. | Sinn Féin

Greece's finance minister says an agreement has been reached between the heavily indebted country and its creditors on its progress in implementing reforms, sources said.

The agreement on the so-called Third Assessment of Greece's latest bailout program will allow Greece to receive fresh funds next year, after implementing workplace reforms, speeding up the settlement of bad loans, tightening up rules for family subsidies and selling off state-owned power plants.

European monetary affairs commissioner Pierre Moscovici also announced that a "staff-level agreement" has been reached, meaning that, while creditor representatives were involved, the European Union's finance ministers must approve the agreement, which they are expected to do Monday.

Finance minister Euclid Tsakalotos announced Saturday that Greece will have to vote on at least two major bills by January 22 to implement the agreement.

These reforms come as an effort to resolve the Greek debt crisis that has been threatening Greece. The Greek debt crisis is the dangerous amount of sovereign debt the Greek government owes.  It became dangerous when a possible debt default threatened the European Union.

Since 2008, EU leaders have struggled to agree on a solution. During that time, the Greek economy shrank 25 percent thanks to spending cuts and tax increases demanded by creditors. Greece's debt-to-GDP ratio grew to 179 percent.

Greece wants the EU to lighten its load by forgiving some of the debt. The EU, led by Germany and its bankers, wants Greece to reform its government and financial structure.

The seeds were sown back in 2001 when Greece adopted the euro as its currency. Greece had been an EU member since 1981 but couldn't enter the eurozone. Its budget deficit had been too high for the eurozone's Maastricht Criteria.