Tough road ahead for Greece, euro zone after bailout

German lawmakers are expected to vote Wednesday on whether to approve a third bailout for Greece. Both Greek lawmakers and eurozone finance ministers now back the deal, but hurdles remain before the Greek crisis is over.

After long hours of negotiations in Athens and Brussels to back the $95 billion bailout package, now comes the hard part. A number of eurozone parliaments must vote on it — starting with Germany, one of the biggest bailout skeptics. The European Commission, the European Union’s executive arm, wants parliaments to pass the deal by Wednesday. That will allow Greece to repay $3.6 billion it owes the European Central Bank by a Thursday deadline.

A key creditor, the International Monetary Fund, has yet to come on board. IMF chief Christine Lagarde said the bailout agreement is an important step forward for Greece, but more needs to be done, especially in providing debt relief to Athens.

Still Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem hailed the agreement at a news conference in Brussels shortly after eurozone finance ministers approved it.

“It’s comprehensive, it’s an ambitious reform package,” said Dijsselbloem. “It addresses the main challenges, both on reaching sound public finances to return to growth, but also structural policy frameworks to enhance competitiveness. And finally, it safeguards financial stability; it deals with issues in the banks.”

One of Greece’s biggest champions, France, also saluted the deal. President Francois Hollande tweeted it proves Europe is capable of advancing on the principles of solidarity and responsibility.

Difficult reforms ahead

Even Greek Finance Minister Euclid Tsakalotos offered an upbeat reaction, although the deal requires Athens to enact difficult reforms.

“This deal — we have never hidden the fact — has many opportunities. It has the opportunity for Greek people to reform their public sector, to address the issues of corruption, to address the issues of tax evasion and a number of very important structural reforms.”

But he said the bailout terms will also create problems for many Greeks. How they are handled will be key. The terms also create problems for Prime Minister Alexis Tsipras, who faces waning support from his own party and may have to call early elections.

Some analysts doubt whether the measures, which include raising taxes, cutting spending and privatizing state assets, will lead to growth and allow Greece to pay back its debts. What is certain is that, in the short term at least, they mean tough times ahead for many Greeks.