Eurozone leaders announced this morning they had reached an agreement with Greece on the terms of the country’s third bailout.
The eurozone summit met on Sunday and leaders debated the deal late into the night, bargaining over the terms of the vital €86 billion bailout for 17 hours in total.
Shortly before 9am this morning, the President of the European Council, Donald Tusk, tweeted: “EuroSummit has unanimously reached agreement.” He said the new bailout deal would provide “financial support”, but entailed “serious reforms”. Jean-Claude Juncker, President of the European Commission, commented this morning that, “The agreement was laborious, but it has been concluded. There is no Grexit .”
If the summit had not been able to reach an agreement last night, Greece would have faced crashing out of the euro and the collapse of its banks. There was also the risk of a catastrophic domino-effect on other eurozone countries.
To secure the bailout of up to €86 billion, Greek Prime Minister Alexis Tsipras was forced to agree to a range of extreme austerity measures for the embattled country. Among them are tax increases, pension reforms and severe spending cuts. Tsipras was also forced to accept the sequestration of €50 billion of Greek assets in a fund that will be off-limits to the Greek government. The fund will be sold off to pay down Greek debt and €25 billion of it will go towards recapitalising the country’s banks.
Jean-Claude Juncker claimed that in the “compromise, there are no winners and no losers. I don’t think the Greek people have been humiliated, nor that the other Europeans have lost face. It is a typical European arrangement.”
Prime Minister Tsipras’ government now has until Wednesday to push through the reforms agreed at the summit. There are concerns of a potential backlash from the Greek public, however. Already, the Greek Labour Minister Panos Skourletis has denounced the bailout terms and said they will lead to another election this year.
Tsipras was able to negotiate some concessions from the eurozone leaders, and was supported by France and Italy, who also advocated softer terms. Most notably, Tsipras made Angela Merkel and the other ‘Troika’ members relent on the demand that Greece take a “time-out” period out of the eurozone.