By Marcus Walker in Athens and Gabriele Steinhauser in Brussels 

A truce between Greece's creditors averts an immediate panic over Greek bankruptcy this summer, yet as officials and onlookers digested the deal, it became apparent that less was agreed than meets the eye.

The deal, struck in the small hours of Wednesday morning at the Eurogroup meeting of eurozone finance ministers in Brussels, broke an impasse between Germany and the International Monetary Fund that was holding up Greece's bailout funding for this summer.

But by papering over deeper differences, the deal sets up tough haggling over the country's debt and economic overhauls for this fall and beyond.

The main breakthrough, heralded by German Finance Minister Wolfgang Schäuble, is that the IMF agreed in principle to rejoin the Greek bailout effort this year with new loans. In return, Germany and other eurozone countries pledged to restructure Greece's rescue loans in 2018 "if...needed." That promise fell short of the IMF's demand that Europe should decide now how it would relieve Greece's debt in coming years.

But the IMF's main negotiator at the talks, European department head Poul Thomsen, stressed at a news conference early Wednesday that the fund isn't on board just yet. The eurozone still needs to tell the IMF what it is prepared to do in 2018, consenting to a menu of debt-relief measures for later use, he suggested. "We will need to assess the adequacy of the measures, and we will only go ahead if there is an assessment that they are adequate."

Mr. Schäuble on Wednesday dismissed Mr. Thomsen's caveats, insisting that new IMF loans were now assured. "He probably was tired then," Mr. Schäuble told reporters.

However, IMF officials continued to emphasize throughout Wednesday that they haven't made a final decision to lend yet.

That implies difficult talks in coming months. The IMF is expected to test, for example, whether eurozone governments are willing to fix Greece's interest payments at such a low level that the bloc's main bailout fund, the European Stability Mechanism, would need subsidies from national Treasurys to cover its costs.

Such disputes over detail could yet hold up the IMF's return to Greek lending, pushing the final decision close to Germany's election year of 2017. As those elections loom closer, German Chancellor Angela Merkel will be reluctant to anger her conservative lawmakers and voters by specifying how much money her country will eventually lose on its loans to Greece, officials in Berlin and elsewhere say.

German officials are confident that the IMF ultimately can't back out, since the fund answers to its controlling shareholders, the EU and the U.S. But the IMF can delay its consent to lend in a quest to make Germany's concessions as concrete as possible, Mr. Thomsen's words suggest.

For now, though, Ms. Merkel has what she needed: a statement of IMF intent rejoin the Greek bailout, lending the IMF's credibility to the effort, which was what Ms. Merkel's restless lawmakers wanted to hear before disbursing any more European money to Athens.

Mr. Schäuble's late-night deal with Mr. Thomsen in Brussels also met Germany's other short-term goals: to delay any final decisions on debt relief until the end of the bailout program, avoiding awkward debates in the German parliament until after next year's elections; and to get the Greek problem off the agenda by June.

Behind the scenes in recent weeks, Ms. Merkel has pressed hard for a solution that secures IMF involvement, releases Greek funding, and postpones debt decisions, for fear that the Greek crisis could erupt again at a time when the European Union is looking more politically fragile than ever before.

The U.K.'s June 23 referendum on whether to leave the EU, the continentwide political fallout from the migration crisis, and the surge in voter support for anti-EU populist parties are all testing the bloc's cohesion.

The U.S. government, worried about the EU's stability, has also lobbied Europe and the IMF in recent weeks to remove the uncertainty over Greece quickly.

Mr. Thomsen on Wednesday hailed the IMF's main gain: a promise by German-led eurozone creditors to undertake a far-reaching restructuring of Greek debt in 2018. "We welcome that it is now recognized by all stakeholders that Greek debt is unsustainable, and...that Greece will need debt relief to make that debt sustainable," he said.

However, Germany previously promised the IMF and Greece in 2012 that it would offer debt relief later if needed -- only to reject such a move afterward, citing Greece's failure to implement all of its promised economic overhauls.

The latest debt promise hinges once again on Greece's ability to complete its side of a tough bailout plan that has proved beyond the political stamina of all Athens governments so far.

--Ian Talley in Washington and Viktoria Dendrinou in Brussels contributed to this article.

(END) Dow Jones Newswires

May 25, 2016 13:21 ET (17:21 GMT)