Greece announces breakthrough in bail-out talks

Papademos' communique came out just a few hours before eurozone finance ministers convened in Brussels for an emergency meeting on Greece.

Going into the meeting, Greek minister Evangelos Venizelos said a "strong and credible program" had been agreed with the troika and that basic elements of a deal with private lenders are also in place.

"We need now the political endorsement of the eurogroup for the final step," he said.

The 'troika' - the European Commission, the ECB and the International Monetary Fund (IMF) - is currently deciding whether Greece should get another €130 billion loan to stop it from going bust. Meanwhile, private lenders are expected to let Athens off the hook for between 50 percent and 70 percent of their returns on Greek bonds as part of the rescue package.

For his part, eurogroup chief and Luxembourg leader, Jean-Claude Juncker kept expectations low.

"There are a lot of unclarities still, we have to get a read-out and I don't expect any final agreement tonight," he told press in Brussels on Thursday.

German finance minister Wolfgang Schauble even told reporters they should not bother to "wait around until the end" of the meeting: "There will be nothing to announce. We just want to get an update."

Schauble noted that the Greek parliament still has to approve the austerity plan - a move expected on Sunday, amid mass street protests.

IMF chief Christine Lagarde welcomed the "very ecouraging news coming out of Athens" on her way into the meeting. ECB supremo Mario Draghi is also expected to take part.

Speaking at a press conference in Frankfurt earlier the same day, he reiterated that the EU Treaty bans the ECB from direct participation in the Greek programme.

But - just as he was leaving the press briefing - he made some final remarks that indicate the bank is looking for ways around the ban. "If the ECB distributes parts of its profits to its member countries as part of the capital key, that is not monetary financing," he said.

The ECB has bought Greek bonds at a high interest rate. If it were to give up its profits on the bonds, Greece could be given a rebate of around €15 billion when they mature - about the same amount analysts say Greece needs on top of the new €130 billion loan.

"Without the willingness of the ECB to forego potential profits on its holding of Greek debt there would have been no deal,"

Sony Kapoor, an economist at the Re-Define think tank said in an emailed statement.

He added: "The ECB came in to try and help Greece so should not be made to bear any losses. But it would also have been unacceptable if it had made any profits on its holdings of Greek debt."