Europe ends Greece's 8-year bailout saga

Under Friday's decision, Greece will receive a final 15 billion-euro ($17 billion) bailout loan installment, 9.5 billion of which will shore up an existing cash kitty to keep the country afloat post-bailout.

With hundreds of reforms requested by its creditors already completed, Greece has made significant progress, but to lend to it again, investors need to know that the country will not collapse under the weight of servicing its debt of 180 percent of GDP.

"We believe that the debt is now viable, we can have access to the markets now and in a context of surveillance and by continuing our reforms we can pursue this", Greek Finance Minister Euclid Tsakalotos said after the meeting. "This is it, we have managed to deliver a soft landing of this long and hard adjustment".

"I think it is the end of the Greek crisis", Tsakalotos said in Luxembourg early Friday.

Euro zone finance ministers also plan to link payouts to Greece of 1.2 billion euros a year until 2022 to continued implementation of reforms agreed under its bailout agreements, a document prepared for the ministers showed on Thursday.

But on Friday, Italy's 10-year bond yield fell 5 bps to 2.69 percent - narrowing the gap over euro zone benchmark issuer Germany to 236 bps. A deal to ease Greek debt has always been seen as a key ingredient in the country's successful return to economic health and foray back into financial markets.

The extension will be accompanied by a 10-year grace period in interest and amortization payments on the same loans. "Now we should all, we and our partners, acknowledge that what was achieved was thanks to the sacrifices of Greek people", Pavlopoulos said on his part.

Opposite the hardliners, who also include the Netherlands and other northern eurozone countries, are France and the European Central Bank, which argue that reduced debt is crucial in order for Greece to gain the trust of the markets. The additional debt relief measures announced today will mitigate Greece's medium-term refinancing risks and improve its medium-term debt prospects, both of which are very welcome results. The Washington-based fund had repeatedly said it would do so once the country's euro-area creditors took sufficient steps to ensure its debt remained sustainable in the long term.

The reform-pushing International Monetary Fund played an active role in the two first Greek bailouts but took only an observer role in the third in the belief that Greece's debt mountain was unsustainable in the long term.