Greece has secured a long-sought extension to catch up with its fiscal targets, Finance Minister Yannis Stournaras has told the parliament.

"We have obtained the extension," Stournaras said on Wednesday, shortly after telling reporters that he had finalised with EU-IMF creditors a new austerity agreement that would be submitted to the Greek coalition government for approval.

Stournaras said the government would tell European counterparts that it is ready to put its latest austerity package to parliament next week after winning additional concessions from foreign lenders.

The government has recently been locked in negotiations with international creditors over $17.56bn package of new austerity measures for the next two years.

One of the conditions of Greece's current $185bn bailout programme is that it reforms the economy so the country can return to the bond markets to raise money by 2014.

Greece has asked for a two-year extension on this deadline so that it has time to introduce austerity measures and labour market reforms.

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A swift deal on the package is crucial for Greece's effort to unlock more aid under its latest bailout, with the country just three weeks away from running out of cash.

Smaller party allies of the coalition of Prime Minister Antonis Samaras's government, the small Democratic Left party and the PASOK Socialists, have yet to back the austerity package, and will examine the concessions made before deciding their stance.

Both parties have refused to support demands by foreign lenders to cut wages and reduce severance payments, but have
maintained that they do not want to jeopardise the government or Greece's place in the eurozone.

Stournaras said Greece would tell the Euro Working Group meeting on Thursday that it had finalised the package after its 'troika' of lenders - the European Commission, European Central Bank (ECB) and IMF made additional concessions.

The package will be put to parliament next week in two separate bills on austerity cuts and labour reforms.

Source: Agencies