Leaders of 19 euro zone countries reached an agreement to offer Greece a new bailout deal after 17 hours of negotiations that went on throughout the night, with Athens forced to acquiesce in all creditor demands.
The deal was announced at a joint news conference by European Council president Donald Tusk and European Commission president Jean-Claude Juncker on the morning of July 13.
The two officials did not go into the details of the agreement, but Tusk said that Athens would need to meet “strict conditions” before the programme can begin, with several parliaments – including the Greek one – required to give their approval first.
Juncker emphasised the fact that there would be no Grexit from the euro zone and said that he was confident that the Greek parliament, where prime minister Alexis Tsipras faced a minor revolt from his party’s MPs in a vote last week over continued austerity, would endorse the terms agreed at the summit.
Tusk said that Eurogroup finance ministers would meet on July 13 to discuss “as a matter of urgency” the issue of bridge financing for Greece, so that the country can meet its short-term financial needs.
Eurogroup president Jeroen Dijsselbloem said that a new fund based in Athens would be given assets worth 50 billion euro, which will contributed to the recapitalisation of Greek banks. According to media reports, Greek opposition to the creation of such a fund was one of the last sticking issues preventing an agreement from being reached.
Tsipras, who faced punishing pressure during the talks and now faces the hurdle of getting approval for the fast-tracking of the measures required by the deal in the Greek parliament, told reporters, “we averted the plan of financial asphxiation and banking system collapse”.
Tsipras spoke of having “fought a tough battle” but of having had to make difficult decisions, claiming, “we sent a message of dignity to all of Europe”.
“The measures are recessionary, but we hope that putting Grexit to bed, means inward investment can begin to flow, negating them.”
Apparently seeking to point to gains by his government in the negotiations, in which an administration elected on an anti-austerity platform conceded on almost every point overnight on July 12, Tsipras said that that he had persuaded euro zone leaders to headquarter the new 50 billion euro recapitalisation fund in Athens, not in Luxembourg as proposed in the original draft.
“We fought hard abroad, we must now fight at home against vested interests,” said the Greek prime minister, who now faces a July 15 deadline to get the agreed measures through parliament in Athens.
(Photo: Theophilos Papadopoulos/flickr.com)