Euro zone leaders zeroed in to a deal with Greece after a marathon summit

July 13, 2015 16:58
Euro zone leaders zeroed in to a deal with Greece after a marathon summit

Euro zone leaders zeroed in to a deal with Greece on Monday after a marathon summit to negotiate a third bailout to keep the near-bankrupt country in the euro zone after an emergency summit. The terms imposed by the international lenders led by Germany might put more pressure on the leftist Prime Minister Alexis Tsipras.
"The agreement was laborious, but it has been concluded. There is no Grexit," European Commission President Jean-Claude Juncker told a news conference. "In this compromise, there are no winners and no losers," Juncker said. "I don't think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement."

German Chancellor Angela Merkel said that she could recommend "with full confidence" that the Bundestag should authorise the opening of loan negotiations with Athens once the Greek parliament has approved the entire programme and enacted the first laws.

The tough conditions imposed on the desperate Greece are similar to the 1919 Versailles treaty that forced the crushing reparations on a defeated Germany after World War One, she said: "I won't take part in historical comparisons, especially when I didn't make them myself."

Tsipras accepted the compromise on German-led demands for the sequestration of Greek state assets worth 50 billion euros in a trust fund beyond government reach, to be sold off primarily to pay down the debt. In a gesture to Greece, some 12.5 billion euros of the proceeds would go to investment in Greece, Merkel said.

Tsipras had to drop his resistance to a full role of the International Monetary Fund in a proposed 86 billion euro bailout, which Merkel has declared essential to win the parliamentary backing in Berlin. Tsipras had to convince his own Syriza party to accept the deal, Labour Minister Panos Skourletis said the terms are unviable and would lead to new elections this year.

Merkel, whose country is the biggest contributor to euro zone bailouts, said from the start that she had driven a hard bargain against the backdrop of mounting opposition at home to more aid for Greece. If Greece meets the conditions, the German parliament would meet to mandate Merkel and Finance Minister Wolfgang Schaeuble to open the talks on a new loan. Then Eurogroup finance ministers will formally launch the negotiations.

Finance ministers said Greece should have a 7 billion euros of funding by July 20, when it has to make a crucial bond redemption to the ECB and a total of 12 billion euros by mid-August for another ECB payment falls due.

EU official said that several options were under consideration to give Greece bridging funds once it has passed the laws, but no final decision was taken.

By Premji

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Tagged Under :
Greece  European Union  Germany  Angela Merkel