An Omen of Things to Come?

Dan Bilefsky and Landon Thomas Jr. of the NYT report, Greece Agrees to a Bailout Deal With EU and I.M.F.:

ATHENS — Prime Minister George Papandreou said Sunday that Greece had reached an agreement with the International Monetary Fund and the European Union on a long-delayed rescue package that is expected to be worth as much as €120 billion. The deal aims to help the country avoid debt default and prevent economic contagion from spreading throughout the region.

In a televised statement to the nation, Mr. Papandreou urged Greeks to accept “great sacrifices” to avoid “catastrophe.”

“I have done and will do everything not to let the country go bankrupt,” he said, appearing sober and resolved in front of his cabinet and appealing to Greeks to show patriotism at a moment of deep crisis. “I want to tell Greeks very honestly that we have a big trial ahead of us.”

He signaled that public-sector employees would see their salaries further reduced, while pensions for retired civil servants would be scaled back. He said members of Parliament would do without their bonuses. He added that in tough negotiations with the International Monetary Fund, the European Union and the European Central Bank, the government had succeeded in avoiding cuts to private-sector salaries.

Mr. Papandreou is the scion of a Socialist dynasty whose father, Andreas Papandreou, helped erect the sprawling Greek welfare state when he was prime minister in the 1980s. The younger Papandreou sought to embolden Greeks to accept what is expected to constitute the greatest overhaul of the state in a generation.

The unprecedented $160 billion bailout of a member of the 16-nation euro zone is the culmination of months of often fraught negotiations. The crisis has tested the credibility of the single currency and created some of the deepest fissures in the European project since its inception, more than half a century ago.

Finance Minister George Papaconstantinou set out some of the details of the austerity measures that are required for the bailout package, which were expected to be disclosed in Brussels later Sunday.

He said that Greece would make budget cuts of €30 billion, or $40 billion, to reduce the budget deficit to less than 3 percent by 2014.

He said the funding from the rescue plan would cover a large part of Greek borrowing needs for the next three years