Eurozone
leaders have reached a deal to provide Greece with a third financial bailout.
Now the Greek prime minister has to convince parliamentarians to pass a raft of
austerity measures that he had promised to avoid.
European
Council President Donald Tusk was the first to confirm the news of theagreement on Monday morning - after around 17 hours of negotiations in
Brussels.
EuroSummit has unanimously reached agreement. All ready to go for ESM programme for #Greece with serious reforms & financial support
— Donald Tusk (@eucopresident) July 13, 2015
Shortly
afterward, Tusk, along with European Commission President Jean-Claude Juncker
and Eurogroup President Jeroen Dijsselbloem, appeared at a press conference to
unveil the agreement.
Tusk,
trying to lighten the atmosphere after what by all accounts were at times
heated discussions, described the bailout deal as an "agreekment" to
save the financially stricken eurozone country from bankruptcy. The European
Council president pledged that the deal would allow Athens to "get back on
track."
"Grexit
has gone," Juncker said, referring to the scenario of Greece being forced
out of the eurozone, if a deal had not been reached.
Speaking to
reporters a few minutes later, Greek Prime Minister Alexis Tsipras appeared to
have started the difficult job of trying to sell the deal as a victory for his
anti-austerity coalition government.
"We
fought a righteous battle to the end," Tsipras said as he left the talks,
adding that despite the tough measures contained in the deal, the "great
majority of Greek people will support this effort."
"We
managed to avoid the most extreme measures," he said, describing the deal
as a signal of "dignity" to all of Europe.
In her
remarks, German Chancellor Angela Merkel stressed that despite the fact that
the agreement provides for some debt relief for Athens, there would be no fresh
debt "haircut" for Greece.
She also
noted that "trust needs to be rebuilt" between Greece and its
creditors, the European Commission, the European Central Bank, and the
International Monetary Fund. Achieving this and implementing the terms of the
bailout would not be easy, she warned.
"The
road will be long, and judging by the negotiations tonight, difficult,"
Merkel said. "Greece has a chance to return to the path of growth, but
"it will be a long road."
Kanzlerin #Merkel zu Griechenland: Weg wird noch lang und mühsam sein, aber ist die Anstrengung wert.
— Steffen Seibert (@RegSprecher) July 13, 2015
The
agreement announced on Monday will require Tsipras to push a raft of austerity measures through the Greek parliament in the near future, including spending
cuts, tax increases and pension reforms. These are just the sort of reforms
that Tsipras and his left-wing Syriza party vowed to stop in their successful
January election campaign. Shortly after the deal was announced, his labor
minister warned that it wasn't clear whether there was a parliamentary majority
prepared to endorse it.
The joint
statement released by the eurozone leaders about the deal said that none of the
other countries would move to approve the deal until the measures have been
passed by Greece.
Among the
most controversial measures was an independent fund, in which Greek assets are
to be gathered and eventually privatized, with the goal of raising 50 billion
euros ($53 billion) to repay Greek debts and recapitalize its ailing banks. One
of the concessions Tsipras appeared to have won, is that this fund is to be
located in Greece and not in Luxembourg as originally proposed.
The deal
came with Greece's banks still shut and capital controls allowing their customers to withdraw a maximum of 60 euros per day from ATMs - at least the
ones that are stocked with cash.
In view of
the urgent need for liquidity, Eurogroup boss Dijsselbloem said eurozone
ministers would meet in a few hours' time to discuss ways of quickly funneling
money to Greece through so-called bridge financing.
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