NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

isn't the only

bank that's gotten a boost

of late: Greek banks have been riding high after word that the European Union will bail out the troubled country's financial sector.

The ASE Composite Index, a broad measure of Greek stocks, gained 3% on Friday, while

National Bank of Greece

(NBG)

shares were up 7% and Alpha Bank shares gained 8% at some points in the day.

On Thursday, the 16 leaders of the eurozone agreed to lend up to 22 billion euros ($29 billion), along with help from the International Monetary Fund, to Greece. Worries have escalated in recent months that the debt-laden country may default. Fears then spread about all the so-called "PIIGS" countries -- Portugal, Ireland, Italy, Greece and Spain -- whose finances are among the weakest of the eurozone.

Although some European countries, particularly Germany, chafed at the notion of bailing out their fiscally unstable counterparts, market reactions forced them to act. The euro currency lost tremendous ground against the dollar and other currencies in recent months, while the debt markets reflected investor anxiety. Not acting in a cooperative fashion would have undercut the monetary credibility of the European Union.

Meanwhile, Greek Prime Minister George Papandreou has put in place a range of measures to cut its deficit from 12.7% of gross domestic product to 8.7% this year, and less than 3% by 2012. Greece has the largest deficit of any EU nation, and some of Papandreou's tactics led to widespread strikes and protests. For instance, he plans to raise fuel taxes and the retirement age, without raising wages as much as he had promised while campaigning for office.

Nonetheless, his measures, and the assistance of other EU counterparts -- which Papandreou called "very satisfactory" -- will keep Greece on its lifeline to pay off bondholders and eventually reach more solid fiscal ground.

--

Written by Lauren Tara LaCapra in New York