Greek bailout: Prime Minister Alexis Tsipras says a 'battle' has been won but 'not the war'

He claimed a small victory for his Syriza party after four-month extension

Syriza party leader Alexis Tsipras (EPA)

The Greek Prime Minister declared victory after reaching a new loan deal with Germany but cautioned that the country has won “a battle, not the war”.

Alexis Tsipras put a positive spin on the four-month extension agreed on its rescue loan package to stave off the imminent threat of it going bankrupt and crashing out of the Eurozone.

“Yesterday we took a decisive step, leaving austerity, the bailouts and the troika behind,” he said in a nationally televised statement.

“We won a battle, not the war. The difficulties, the real difficulties...are ahead of us.”

He defiantly insisted that last night’s agreement delivered on his party’s promise to fight austerity and dispensed with the loathed “troika” of the European Commission, European Central Bank and International Monetary Fund.

But Greece must produce a list of proposed economic reforms by Monday night to be agreed with its creditors by the end of April.

A source at the European Central Bank ruled out restrictions on savers' right to withdraw their deposits, aiming to dismiss expectations that the Greek banking system would crumble.

Mr Tsipras and his Syriza party swept into power last month largely on promises to end.

But Athens was forced to accept a conditional extension of the bailout at the insistence of Eurogroup members, led by Germany, and must still deal with the troika, albeit under the name “the three institutions”.

German politicians claimed victory after the latest deal and Ireland, which had to make its own deep budget cuts under its own EU/IMF bailout programme, said the Eurozone had yielded nothing to Greece.

David Cameron and the Greek PM Alexis Tsipras met on the sidelines of the EU leaders summit in Brussels (Reuters)

Michael Noonan , the Irish finance minister, said: “(Syriza’s) political problem is that this a reversal of their election position. There is absolutely nothing on the table that could be considered a concession."

"They're now compromising and compromising quite significantly," he told national broadcaster RTE, but made clear Athens had had little choice. "The biggest threat to Greece was that their banking system would go belly up next Wednesday."

About €1 billion (£750 million) left Greek bank accounts on Friday, a senior banker told Reuters, due to savers' fears that the talks would fail, on top of the €20 billion (£15 billion) withdrawn since Syriza’s victory was predicted in December.

Angela Merkel is widely disliked in Greece as a symbol of the control people feel Germany exerts on its economy (AFP)

The Greek finance minister, Yanis Varoufakis, has assured residents that the country did not face financial ruin and their savings were safe.

"It is quite clear that the reason why we had a deposit flight was because every day, even before we were elected, Greeks were being told that if we were elected and we stayed in power for more than just a few days the ATMs will cease functioning," he said.

"Today's decision puts an end to this fear, to the scaremongering."

Additional reporting by Reuters