Greece will avoid default after bailout deal –but faces more austerity

Unions vow strike action after leftist-led government agrees to further slash pensions and cut tax breaks

The long road to Greece emerging from its worst financial crisis in modern times reached another milestone on Tuesday as the country concluded a crucial compliance review that will allow it to avert default in July.

At the cost of yet more painful austerity - in the form of extra pension cuts and tax increases - international creditors agreed to disburse a7.5bn (6.3bn) in emergency loans to enable Athens to honour maturing debt repayments. More importantly, lenders accepted to set talks in motion on making Greece's debt mountain more manageable - vital if the country is to gain access to the capital markets from which it has been almost completely exiled since 2009.

Related: Greece reaches deal with creditors to pave way for bailout talks