Update | Euro zone finance ministers approve Greek request for bailout extension

Greece cleared a major hurdle yesterday in its continuing battle to remain solvent after its European creditors approved a four-month extension to its financial bailout but the cash-strapped country still has a lot to do to convince its partners that it deserves more help beyond the summer.

The country's creditors in the 19-country euro zone endorsed Greece's request for the extension after the European Commission, European Central Bank and International Monetary Fund -the main institutions handling Greece's loans - backed a list of reforms that Athens proposed in a letter late Monday.

Greece had to draw up the list, which includes measures to combat tax evasion and corruption, to get the bailout extended. Without a financial lifeline over the coming few months, it faces the possibility of going bankrupt, imposing capital controls and ditching the euro.

Yesterday's deal comes just days before Greece's €240 billion (HK$2.11 trillion) bailout program expires and is aimed at buying time for both sides to agree on a longer-term deal to ease the burden of the bailout loans.

Greece will, in all likelihood have to negotiate a new financial agreement with its creditors to see it past June, when big bond repayments are due.

"The three institutions agreed to start the process with this," eurogroup president Jeroen Dijsselbloem said on RTL television. "They thought it was a serious enough list and all the countries have just agreed with that in the meeting so we can start."