Lawmakers in Cyprus approved three bills late Friday aimed at securing a bailout for its troubled banks from the European Union and averting a financial meltdown.

The legislation includes one bill that allows the government to divide the wobbling lenders into good and bad banks -- a law that would likely to be applied first to Cyprus Popular Bank. The goal is to restructure without hurting small depositors.

A second law puts in place restrictions on financial transactions in times of crisis and a third sets up a "solidarity fund."

---

The country is expected to adopt more legislation in an effort to raise the 5.8 billion euros Cyprus needs to get an EU bailout.

Among the other bills being brought forward is one that imposes a tax of less than 1 percent on all bank deposits, Averof Neophytou, deputy head of the governing DISY party told The Associated Press.

Earlier Friday a Greek Bank was chosen to take over the local branches of Cyprus's troubled banks in a bid to shelter Greek customers of those institutions and help Cyprus shrink its bloated banking sector.

Piraeus Bank of Greece was to take over the operations in a deal that a source close to the matter said involved the transfer of 17 billion euros of loans and 14 billion euros of deposits, Reuters reported.

The terms of the deal were not expected to emerge until Sunday, and would need to be approved by European competition authorities, according to Greece's bank bailout fund.

Worried the crisis could trigger panic among Greek depositors, Greek officials had been working to agree on a deal since early this week. They were forced to put the plans on hold after Cyprus voted down a proposed bank levy included in its bailout agreement.

"We have responded to the necessity of utterly safeguarding the depositors of the Cypriot banks in Greece," Piraeus Chairman Michalis Sallas said.

There was no immediate announcement about the fate of the Greek operations of Cyprus's third-biggest bank, Hellenic Bank, which are much smaller than those of the top two.

"It's unclear if the deal will include Hellenic Bank. Either way, it won't move the needle much," a Greek bank bailout fund official told Reuters.

Cypriot banks hold 8 percent of Greek banking deposits and 10 percent of loans. They have about 300 branches in Greece.

Reuters and The Associated Press contributed to this report.

A New York City hotel worker has settled a civil lawsuit she filed against Dominique Strauss-Kahn, the former head of the International Monetary Fund, whom she accused of sexual assault, a New York judge said on Monday.

The agreement ends a legal saga that began when Nafissatou Diallo, 33, told police that Strauss-Kahn attacked her in his suite at the Sofitel Hotel in Manhattan on May 14, 2011. Her suit alleged that a naked Strauss-Kahn emerged from the bathroom in his $3,000-a-night suite and forced her to perform oral sex.

Bronx Supreme Court Justice Douglas McKeon announced the two sides had reached a deal to end the litigation, but said details of the settlement, including the amount of any damages to be paid to Diallo, will not be made public.

---

The scandal forced Strauss-Kahn to resign his post as head of one of the world's most influential international finance organizations and wrecked his hopes of running for president in his native France. Prosecutors initially expressed confidence in the evidence, including DNA that showed a sexual encounter. But they dropped the criminal case in August 2011 after developing concerns about Diallo's credibility, including what they said were inconsistencies in her account of what happened immediately following the incident.

 

Accusers in such cases often hide from the media glare, and many media outlets protect their identities by not revealing their names.

But Diallo, the daughter of an imam from Guinea, broke her silence in July 2011, while the criminal investigation was still active, revealing her identity in interviews to Newsweek and ABC News.

She filed her civil lawsuit just weeks before the charges were dismissed, claiming he forced her to perform oral sex and caused her physical and emotional damage.

Strauss-Kahn, 63, filed a countersuit earlier this year against Diallo for defamation. He has said the sexual encounter was consensual but has admitted it was a "moral error."

The resolution of the civil case brings Strauss-Kahn closer to ending his legal troubles, which have persisted since his return to France after the initial incident.

Strauss-Kahn is awaiting a decision by a French court on his request to halt an inquiry to determine whether he should stand trial on pimping charges related to sex parties attended by him and by prostitutes.

He has quietly begun to resume his career in recent months, delivering speeches at private conferences and setting up a consulting firm in Paris.

Strauss-Kahn was not required to appear personally in court in New York, but the judge ordered Diallo to be present.

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Tens of thousands of angry Greek protesters filled the streets of Athens on Tuesday to greet German Chancellor Angela Merkel, who offered sympathy but no promise of further aid on her first visit since the euro crisis erupted three years ago.

As police fired tear gas and stun grenades to halt angry crowds chanting anti-austerity slogans and waving swastika flags, Merkel's host, Prime Minister Antonis Samaras, welcomed her as a "friend."

Blamed by many Greeks for imposing draconian budget cuts in exchange for aid, Merkel reaffirmed Berlin's commitment to keep the debt-crippled Greek state inside Europe's single currency.

"I have come here today in full knowledge that the period Greece is living through right now is an extremely difficult one for the Greeks and many people are suffering," Merkel said during a joint news conference with Samaras just a few hundred yards from the mayhem on Syntagma Square, outside parliament.

"Precisely for that reason I want to say that much of the path is already behind us," she added, offering a public display of support to Samaras's three-month-old government on her first visit to Greece since 2007.

---

She tried to reassure her hosts that their reforms would eventually pay off, but also made clear that Greece, which has seen its unemployment rate surge to nearly 25 percent and economic output shrink by a fifth, would not solve its problems overnight.

Angela Merkel greeted warmly by prime minister, but not by Greeks

Samaras promised to implement economic reforms necessary to restore confidence: "The Greek people are bleeding but are determined to stay in the euro," he said.

"All of those who made bets that Greece would fail... will lose," Samaras added, according to Spiegel.

On the other side of the parliament building, tens of thousands of demonstrators defied a ban and gathered to voice their displeasure with the German leader, whom many blame for forcing painful cuts on Greece in exchange for two European Union/International Monetary Fund bailout packages worth more than 200 billion euros ($260 billion).

Greek police fired teargas and stun grenades when protesters tried to break through a barrier to reach the cordoned-off area where Merkel and Samaras were meeting. Some demonstrators pelted police with rocks, bottles, paint bombs and sticks.

Four people dressed in World War II-era German military uniforms and riding on a small jeep, waved black-white-and-red swastika flags and stuck their hands out in the Hitler salute. Some protesters carrying banners bearing slogans such as, "No to the Fourth Reich," the BBC reported.  

Other banners read "Merkel out, Greece is not your colony" and "This is not a European Union, it's slavery."

Some 6,000 police officers were deployed, including anti-terrorist units and rooftop snipers, to provide security during the six-hour visit. German sites in the Greek capital, including the embassy and the Goethe Institute, were under special protection. This security operation was one of Athens' biggest in a decade, the BBC reported.

Among the peaceful protesters, teacher Christina Vassilopoulou, 37, told AFP that despite having a doctorate, she only makes 900 euros (about $1,160) a month.

"We have children that go hungry and most of the parents are unemployed," she told the AFP news agency, the BBC said.

Constantine Spiliagopoulos, a lawyer who was also taking part in the protests said Merkel was "one of the main reasons that Greece's low income and the working classes of Greece are under attack," according to the BBC.

"That is why we must make our presence felt, we must shout against these polices and show that we will do everything so that they do not continue," she added.

Constantinos Siathas was more hopeful, telling The Associated Press: "I think most people, at least those who think and don't act based on feelings or utopian ideas, are pleased and are expecting a lot from Mrs. Merkel's visit."

Yiannis Bournos, a spokesperson for the leftist Syriza party, criticized Merkel's visit, telling the BBC that Greeks were "frustrated and enraged because they clearly understand that Mrs. Merkel's visit is just a theater play for the political support of a collapsing coalition."

Aid money "urgently needed"
After steering clear of Greece for the past five years, Merkel decided to visit now for several reasons.

She was keen to show support for Samaras, a fellow conservative, as he struggles to impose more cuts on a society fraying at the edges after five years of recession.

With a year to go until Germany holds a parliamentary election, Merkel also hoped to neutralize opposition criticism at home that she has neglected Greece and contributed to its woes by insisting on crushing budget cuts.

After her government flirted earlier this year with the idea of allowing Greece to exit the eurozone, she now appears determined to keep it in, at least until the German election is out of the way.

IMF: Global economic slowdown is getting worse, US must avoid 'fiscal cliff'

Greece is in talks with its "troika" of lenders - the European Union, European Central Bank and International Monetary Fund - on the next tranche of a 130 billion euro ($170 billion) loan package, its second bailout since 2010.

Without the 31.5 billion euro tranche, Greece says it will run out of money by the end of November.

The European commissioner for economic and monetary affairs, Olli Rehn, said Tuesday that Greece's creditors would not allow the country to go bankrupt, according to the German publication Spiegel. As European Union finance ministers met on Tuesday, Rehn said the next aid package would be granted "at the latest by November."

Merkel said the aid payment was "urgently needed" but stopped short of promising that the funds would flow.

"The troika report will come when it is ready. Being thorough is more important than being quick," Merkel said.

"We are working hard on this, but we must resolve all the problems," she added. "I think we'll see light at the end of the tunnel."

"This is an effort that should be seen through, because otherwise it would make the circumstances even more dramatic later on," she added, according to Spiegel.

Ties between Germany and Greece run deep. Thousands of Greeks came to Germany after World War II as "guest workers" to help rebuild the shattered country and more than 300,000 Greeks currently reside there.

But the relationship is clouded by atrocities Greeks suffered at the hands of the Nazis. Samaras' own great grandmother killed herself after she watched Nazi tanks rolling down the streets of Athens and the swastika flying over the Acropolis.

Greek President Karolos Papoulias, whom Merkel also met on Tuesday, fought against the Germans as a teenager, before fleeing to escape persecution by the Greek military dictatorship and finding refuge in Germany.

The crisis has revived long-dormant animosities, with Greek protesters burning effigies of Merkel in Nazi gear and German media playing up images of lazy Greeks keen for German cash.

Relations hit a post-war low early this year when Merkel's finance minister, Wolfgang Schaeuble, likened Athens to a "bottomless pit" and proposed imposing a European "Sparkommissar" on Greece to control its finances.

"The average German voter is irritated at the thought of dispatching more taxes or savings to feckless southerners, yet is desperate for the respect and goodwill to Germany that comes from public displays of magnanimity," said David Marsh, chairman of think tank OMFIF.

"When Merkel flies to Athens, she's showing she's in charge, and she cares."

Reuters contributed to this report.

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ATHENS - A conservative-led Greek government has been agreed and will form a team to "renegotiate" the international bailout deal that would save the country from bankruptcy, the leader of one of the coalition parties said Wednesday.

Socialist PASOK leader Evangelos Venizelos said his party would enter a three-way alliance with the larger conservative New Democracy and that cabinet posts would be decided by Wednesday evening.

---

He said the key issue would be to form a team to renegotiate the $164.79 billion bailout deal from the European Union and International Monetary Fund.

Greece avoids 'Drachmageddon' but Europe debt crisis remains

"Greece has a government and this is the message that the outgoing finance minister [George] Zanias will take to the Eurogroup," Venizelos told reporters.

Reuters said Antonis Samaras would meet President Karolos Papoulias later on Wednesday to announce the coalition deal, after which he expected to be sworn in as prime minister.

The opposition radical leftist bloc SYRIZA came second in the election and strongly opposes the bailout. A graph illustrating the results was published on the BBC website.

A Greek exit from the euro joint currency zone is still viewed as a possibility, despite a narrow majority for parties who are broadly in favor of a bailout, despite the inevitable tough austerity measures.

The Daily Telegraph reported that although public sector wages and pensions have been cut by 25-30 per cent since the country’s economic crisis took hold, thousands of redundancies have not taken place as promised, a privatization program has barely got off the ground and tax evasion remains endemic.

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Spain will seek financial help from its Eurozone partners but exactly how much won't be known until private audits are undertaken, the country's economy minister announced Saturday.

Earlier, European finance ministers discussed plans to offer Spain up to $125 billion (100 billion euros) in a bid to stabilize its banks -- and ease concerns over the even bigger European debt crisis. That amount was described as an upper limit, not an indication of what Spain would ask for.

---

After Spain's announcement, the Eurozone ministers issued a statement that they expected a formal request "shortly" and are "willing to respond favorably."

Spain earlier said it wanted to wait for two independent audits — due by June 21 — before deciding on whether to seek aid, and it was not clear if those audits were being stepped up.

Christian Science Monitor: As Europe peers into economic chasm, Africa is rising

Spain had resisted asking for a bailout since previous ones for Greece, Ireland and Portugal came with demands for tax increases and spending cuts.

Economy Minister Luis de Guindos emphasized the aid would not come with "micro-economic conditions".

U.S. Treasury Secretary Tim Geithner issued a statement praising the "concrete steps on the path to financial union" for the Eurozone.

Investors and politicians have been increasingly concerned that Spain might not be able to find the money to prop its ailing banks by itself. 

Spain warns time is short as G7 discusses eurozone crisis

A report from the International Monetary Fund estimated Spanish banks need a recapitalization injection of at least $50 billion following a stress test it performed on the country's financial sector. That report came out early Saturday, three days ahead of schedule, underscoring the urgency of the situation. 

Officials said there had been a heated debate over the IMF's role in Spain's bank rescue, which Madrid wanted kept to a minimum. It will not provide any of the money.

In the end it was agreed that the IMF would help monitor reforms in Spain's banking sector, while EU institutions would ensure Spain stuck to its broader economic commitments. 

Eurozone policymakers were eager to shore up Spain's position before June 17 elections that could push Greece closer to a Eurozone exit and unleash a wave of contagion.

Nonetheless, some analysts said financial markets might be calmed by the announcement when they reopen on Monday.

"The figure of up to 100 billion (euros) is more encouraging and pretty realistic; it's an attempt to cap the problem," said Edmund Shing, European head of equity strategy at Barclays.

"The issue, however, is there is still a lack of detail about where the money's coming from, which is crucial. The market will treat it with some caution until they see how it will be funded." 

World Bank on Greece crisis: Spain and Italy could be next

The Eurogroup said the funds could come from either from a temporary rescue fund, the EFSF, or the permanent mechanism, the ESM, which is due to start next month. Finland said that if money came from the EFSF, it would want collateral.

EU sources said there was a preference to channel money to Spain through the ESM, rather than the EFSF. Under the ESM, an approval rate of 90 percent or less is needed to trigger aid, and the fund also has more flexibility in how it operates.

"That's why it's so important that the ESM ... be ratified quickly," German Finance Minister Wolfgang Schaeuble said.  

Spain has already spent $20 billion bailing out small regional savings banks that lent recklessly to property developers. 

Spain's biggest failed bank, Bankia, will cost $25 billion to rescue and its shareholders have been wiped out.

The race to resolve the banks' troubles comes after Fitch Ratings cut Spain's sovereign credit rating by three notches to BBB, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis. 

It said the cost to the Spanish state of recapitalizing banks stricken by the bursting of a real estate bubble, recession and mass unemployment could be between $75-$125 billion. The higher figure would be in a stress scenario equivalent to Ireland's bank crash.

Greeks withdraw $894 million in one day

Italy could yet get dragged in too. Its industry minister, Corrado Passera, said the economic situation in Italy had improved since the end of 2011, but remained critical. "Europe was more disappointing than we had expected, it was less capable of tackling a relatively minor problem such as Greece," Passera told a conference. 

While Spain would join Greece, Ireland and Portugal in receiving a European financial rescue, officials said the aid would be focused only on its banking sector, without taking the Spanish state out of credit markets. 

That would be crucial to avoid overstraining the Eurozone's rescue funds, which would struggle to cover Spanish government borrowing needs for the next three years plus possible additional assistance for Portugal and Ireland. 

Conditions in the plan would be related to the banks and would probably not add to the austerity measures and structural economic reforms that Spain's government has already put in place, EU and German sources said. 

A "bailout lite" would help salvage Spanish pride. Spain is the world's 12th largest economy and No. 4 in the Eurozone. EU and German officials have cited national pride as a barrier to requesting a full assistance program. 

The Associated Press and Reuters contributed to this report.

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A prosecutor in France is to consider claims by two prostitutes that ousted Intermational Monetary Fund chief Dominique Strauss-Kahn was involved in a gang rape at a party in Washington, according to a French newspaper.

The paper, Liberation, reported (in French) that it was alleged that two businessmen and a senior French police officer were present during the attack in 2010, when Strauss-Kahn was being tipped to become the next French president.

---

Judges in France asked a French prosecutor to look into the escorts' claims and the prosecutor is due to announce next week if a further, formal investigation will take place, according to Liberation. Meantime, the New York Times reported the assault allegedly occured at a "sex party" at the W Hotel in Washington in December 2010.

Strauss-Kahn and the others have not been charged in relation to the claim, but Strauss-Kahn does face separate charges of “aggravated pimping.”

The escorts made the claims about the alleged gang rape in testimony given during the ongoing investigation of Strauss-Kahn’s involvement in an organized prostitution ring in Normandy.

The alleged assault in Washington took place during a three-day trip to the city. The two escorts had accompanied two French businessman as their secretaries, according to Liberation's report.

It alleged that one of the escorts, called "Marion," was raped by Strauss-Kahn in the presence of the three others, who she said did nothing to stop what was described as rough sex despite her vocal protests. 

Meet Monsieur Caramel Pudding, likely French president

According to excerpts of eyewitness testimony published by Liberation online, the others looked on while Strauss-Kahn "held her hands down, grabbed her hair and hurt her." The escort also alleged that one of the other men held her hands down as Strauss-Kahn sexually assaulted her.

The woman gave testimony in the ongoing investigation but did not press charges in relation to the Washington incident. Normally victims need to press charges for a case to be brought, but officials can decide to do so in certain cases.

The prosecutor will now decide whether to pursue the investigation to determine if there are grounds for a "group rape" charge.

NYC maid can sue
On Tuesday, a judge in New York ruled that a sexual assault lawsuit brought by hotel maid Nafissatou Diallo, 33, against Strauss-Kahn could go forward to trial, rebuffing his claim that he had diplomatic immunity.

State Supreme Court Justice Douglas McKeon's ruling kept alive the civil case that emerged from a May 2011 hotel-room encounter that also spurred now-dismissed criminal charges against Strauss-Kahn. The episode was the first in a series of allegations about his sexual conduct that sank his political career.

The housekeeper said Strauss-Kahn, 63, tried to rape her when she arrived to clean his Manhattan hotel suite. Strauss-Kahn has denied doing anything violent during the encounter.

Prosecutors dropped the criminal charges last summer, saying they had developed doubts about Diallo's trustworthiness because she had lied about her background and her actions right after the alleged attack. Diallo has insisted she told the truth about what happened in the encounter itself.

Strauss-Kahn bundled away from Cambridge University protesters

Strauss-Kahn resigned his IMF job days after his arrest, and he didn't assert immunity from the criminal prosecution; his lawyers have said he was focused then on trying to exonerate himself. But after the lawsuit was filed, about three months later, they said he should have immunity from the civil case.

Invoking an American sports metaphor, the judge said their argument amounted to a "Hail Mary" pass, and one that raised a question of fairness.

"Strauss-Kahn cannot eschew immunity (in the criminal case) in an effort to clear his name only to embrace it now to deny Ms. Diallo the opportunity to clear hers," the judge wrote. 

NBC News and The Associated Press contributed to this report.

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Updated at 4:20 a.m. ET: LILLE, France -- Former IMF chief Dominique Strauss-Kahn was handed preliminary charges Monday alleging he was involved in a hotel prostitution ring in France, a stunning blow for the onetime French presidential hopeful.

The investigation on suspicion of complicity in a pimping operation is the latest judicial headache for the Socialist ex-finance minister. The move could lead to a trial but it falls short of charging him.

His lawyer said the married, 62-year-old Strauss-Kahn engaged in "libertine" acts but did nothing legally wrong.

---

Strauss-Kahn himself left in a black sedan without speaking publicly. He was released under judicial supervision and was barred from contacting others charged in the case, a judicial official said. The official spoke on condition of anonymity because the investigation is still underway.

The Lille prosecutor's office said in a statement he was required to post 100,000 euros ($133,300) in bail. He is forbidden to contact witnesses, the press and others involved in the prostitution case, it said.

Under the spotlight
Strauss-Kahn has seen his sexual behavior scrutinized in the international spotlight over the past year. The French preliminary charges come two days before a New York court takes up a civil case in which a hotel maid accuses Strauss-Kahn of sexually assaulting her.

The Lille case centers on allegations that a prostitution ring organized by Strauss-Kahn's business associates supplied clients at the city's Carlton Hotel.

Already in the case, eight people, including two Lille businessmen and a police commissioner, have been arrested, and construction firm Eiffage fired an executive suspected of using company funds to hire sex workers.

Strauss-Kahn investigated in French prostitution ring

Judges had the option of putting him under investigation for having potentially benefited from misappropriated company funds if he knowingly attended prostitute sessions paid for by his executive friends using expense accounts.

Instead, the case against Strauss-Kahn hinges on whether he knew he was partying with prostitutes, and whose money was used to pay them. Lawyers for the ex-IMF chief have acknowledged that he attended orgies.

In itself, using prostitutes is not illegal in France.

Prostitutes questioned in the case said they had sex with Strauss-Kahn during 2010 and 2011 at a luxury hotel in Paris, a restaurant in the French capital and also in Washington, D.C., where he lived while working for the Washington-based IMF, judicial officials say.

"Mr. Strauss-Kahn is finding himself, in large part because of his fame, thrown to the butchers," lawyer Richard Malka said. "Colossal police and judicial means were deployed to crack and dissect his private life to an infinite degree, with the only goal being to invent and then castigate what can be considered a crime of lust."

He said it was inappropriate to use "simple libertine activity" to accuse Strauss-Kahn of procuring prostitutes or involvement in organized crime.

French newspapers have dubbed the prostitution investigation "The Carlton Affair" after the name of the expensive Lille hotel where some encounters allegedly took place.

Dominique Strauss-Kahn flees student protesters

Strauss-Kahn's wife of two decades, renowned TV journalist Anne Sinclair, is now editor of the new French version of the Huffington Post website. The site carried a banner headline Monday night reading "PRELIMINARY CHARGES" over a photo of Strauss-Kahn.

The Malka suggested that the charges were politically tinged, since they came down a month before France's presidential election. Just a year ago, Strauss-Kahn, a prominent economist, had topped polls as the man most likely to win.

Strauss-Kahn quit the IMF after the New York hotel maid said he sexually assaulted her in May. The criminal charges were later dropped when prosecutors said the maid's testimony was unreliable. Strauss-Kahn said the encounter was "inappropriate" but insisted it wasn't violent.

The maid, an immigrant from Guinea, has insisted she was truthful about the encounter and is pursuing claims against Strauss-Kahn in a civil lawsuit. A hearing is set for Wednesday on Strauss-Kahn's claim that diplomatic immunity should insulate him from the lawsuit. Strauss-Kahn is not expected to attend.

The Associated Press and Reuters contributed to this report.

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Updated at 10 a.m. ET: BRUSSELS -- After months of tough negotiating, Europe and the International Monetary Fund sealed a deal early Tuesday to hand Greece €130 billion ($170 billion) in additional bailout loans to save it from a default that threatened the viability of the euro, undermining global economic confidence.

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The early-hours agreement to avert default comes after negotiators persuaded private bondholders to take greater losses and Athens to commit to very severe austerity measures.

Ministers finalized measures to cut Greece's debt to 120.5 percent of gross domestic product by 2020, a fraction above the target, to secure its second rescue in less than two years and meet a bond repayment next month.

The eurozone and the IMF, which will be providing the money for the new bailout, hope the new program will eventually put Greece back into a position where it can survive without external support and secure its place in the euro currency union. Finance ministers from Greece and the other 16 euro countries meeting in Brussels wrangled until the early morning hours over how that could be achieved.

What does the Greece bond swap bailout deal mean?

On top of the new rescue loans, Athens will also ask banks and other investment funds to forgive it some €107 billion in debt, while the European Central Bank and other national central banks in the eurozone will forgo profits on their holdings.

The accord, which had been months in the making, seeks to reduce Greece's massive debts on all fronts, with both private and official creditors going beyond what they had said was possible in the past.

But the costs for Greece, in potential loss of autonomy and further strict austerity measures, were implicit from a statement from Eurogroup, which Europe's finance ministers belong to.

"The Eurogroup is fully aware of the significant efforts already made by the Greek citizens but also underlines that further major efforts by the Greek society are needed to return the economy to a sustainable growth path," the statement read. "We reiterate our commitment to provide adequate support to Greece during the life of the programme and beyond until it has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment programme."

So it was clear that Greece, which kicked off Europe's debt crisis two years ago, was at the very best starting a long and painful road to recovery. At the worst, the new program would push the country even deeper into recession and see it default on its debts further down the line.

"It's not an easy (program), it's an ambitious one," said Christine Lagarde, the head of the IMF, adding that there were significant risks that Greece's economy could not grow as much as its international creditors were hoping.

The austerity measures wrought from Greece are also widely unpopular among the population and may hold difficulties for a country which is due to hold an election in April. Further protests could test politicians' commitment to cuts to wages, pensions and jobs.

So social upheaval was a real risk, Paschos Mandravelis, a political analyst at Greece's Kathimerini newspaper, told NBC News' Andy Eckardt.

"If people in the broad middle class landscape get desperate and feel choked, there is the possibility of some kind of uprising," he said.

A Greek's only hot seller: Tear gas masks

And some economists say there are still questions over whether Greece can pay off even a reduced debt burden.

A return to economic growth could take as much as a decade, a prospect that brought thousands of Greeks onto the streets to protest against austerity measures Sunday. The cuts will deepen its five-year recession, hurting government revenues.

Europe's economy edges closer to recession

A report prepared by experts from the European Union, European Central Bank and International Monetary Fund said Greece would need extra relief to cut its debts near to the official debt target given the worsening state of its economy.

If Athens did not follow through on economic reforms and savings to make its economy more competitive, its debt could hit 160 percent by 2020, said the report, obtained by Reuters.

"Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it," the nine-page confidential report said.

NBC News, msnbc.com, Reuters and The Associated Press contributed to this report