Greece has approved pension and health care cuts as part of the reforms agreed in return for the 130 billion euro ($171 billion) bailout deal approved by the zone.

“This government will do its utmost to implement fully and effectively both the program and the complementary actions,” Greek Prime Minister Lucas Papademos said in Brussels. 

“Greece has approved a very ambitious program,” European Commission President Jose Barroso said after the meeting with Papademos. “There is no other alternative, and I think that when there is no other alternative people understand much better the urgency of the tasks at hand,” he added.

Subsequent to the agreement by banks to write off more than half of their Greece debt holdings Standard & Poor's announced that its rating on Greek sovereign debt has been downgraded to selective default.

Doubts have already been raised about Greece on whether approved austerity and debt relief measures, which the country's emergency-lending troika -- the European Union, the European Central Bank and the IMF - has highlighted as a prerequisite for bailout package, will be sufficient to ease the staggering debt load.

Skepticism also surrounds the question if deep spending cuts can possibly enable Greece to ease its debt. Many economists consider austerity measures a recipe for slow growth and high unemployment, which in turn adds to the burden on private holders of the country's debt.

The bailout conditions demanded by the troika include regular inspections to ensure Greece sticks to the agreed-on austerity targets -- an area in which the country has appeared deficient in its previous commitments with its lenders.

Also the Greek government will have to cope with mounting public opposition to the austerity measures. Last month riots flared up in the capital, Athens, and other Greek cities, with thousands joining the protest rallies as Greek lawmakers moved to approve the austerity package, which was required for the bailout deal to be sanctioned.

Similar tensions could erupt further as Greek MPs move to implement recently passed cost cutting measures.