Finance ministers of the 19-nation euro single currency group on Friday approved the first 26 billion euros ($29 billion) of a vast new bailout package to help rebuild Greece's shattered economy.

The approval came after Greece's parliament passed a slew of painful reforms and spending cuts after a marathon overnight session that divided the governing party, raising the specter of early elections.

"Of course there were differences but we have managed to solve the last issues," Eurogroup chairman Jeroen Djisselbloem told reporters in Brussels. "All the intense work of the past week has paid off." Ten billion euros will be available to recapitalize Greece banks, while a second slice of 16 billion euros will be paid in installments, starting with 13 billion euros by Aug. 20 when Greece must make a new debt payment to the European Central Bank. "On this basis, Greece is and will irreversibly remain a member of the Euro area," said European Commission President Jean-Claude Juncker after the deal was sealed.

The final rescue package would eventually give Greece up to 86 billion euros ($93 billion) in loans over three years in exchange for harsh spending cuts and tax hikes.

The deal must still be approved by some national parliaments, including Germany, but that is largely considered to be a formality. Some nations, such as Finland, have already given their approval.

The move saves Greece from a disorderly default on its debts which could have come as soon as next week and helps end months of uncertainty that has shaken world markets, but it means more hardship for ordinary Greeks. Greece's most influential creditor and perhaps its harshest critic welcomed the agreement as "a good result." "We must nonetheless remain cautious because of course we are providing huge sums of money," German Finance Minister Wolfgang Schaeuble said.

"If the Greeks don't want this program, it won't work," he told ZDF television. "But that's why we are only paying out step by step and making sure that we don't make the risks greater than is inevitable if we want to help Greece." A key sticking point has been whether to forgive some of Greece's debts.

The International Monetary Fund has insisted that Greece must be given some form of debt relief before it will participate in any new bailout, but a number of the country's euro partners oppose such a move. "It is equally critical for medium and long-term debt sustainability that Greece's European partners make concrete commitments ... to provide significant debt relief, well beyond what has been considered so far," IMF chief Christine Lagarde said in a statement. Keen to have the IMF on board, the finance ministers said the eurogroup "stands ready to consider, if necessary, possible additional measures" such as longer grace and repayment periods.

But this would only take place in October, once a review has been made of whether Greece is fully respecting the bailout terms. The bailout bill passed through the Greek parliament thanks to support from opposition parties, with 222 votes in favor, 64 against, 11 abstentions and three absent in the 300-member parliament.