Eu­ro­zone agrees on third bailout

Financial Mirror (Cyprus) - - FRONT PAGE -

Af­ter marathon meet­ings through­out the week­end, Eu­ro­zone lead­ers reached an agree­ment on a third bailout to save Greece from bank­ruptcy on Mon­day, but a fi­nal deal is “still weeks ahead”.

The stand­off also means that Alexis Tsipras stays on as Prime Min­is­ter and will prob­a­bly spear­head a loose ‘na­tional unity’ gov­ern­ment to im­ple­ment the res­cue plan, which some of his own ran-and-file left­ists op­pose.

Euro­pean Coun­cil Pres­i­dent Don­ald Tusk said that Fi­nance min­is­ters will as a mat­ter of ur­gency dis­cuss how to help Greece meet her fi­nan­cial needs in the short term, pri­mar­ily through bridge fi­nanc­ing.

Fol­low­ing na­tional pro­ce­dures, the Eurogroup will now work with the In­sti­tu­tions (for­merly the Troika of in­ter­na­tional lenders) to swiftly take for­ward the ne­go­ti­a­tions.

Turks said that the EuroSum­mit had unan­i­mously reached agree­ment, but the re­port­edly talks stall on two points, one be­ing IMF in­volve­ment in a new 3-year bailout.

All is ready to go for the ESM pro­gramme for Greece that will in­clude se­ri­ous re­forms and fi­nan­cial sup­port, he said.

Eu­ro­zone lead­ers warned that a fi­nal deal is still weeks away and will re­quire rat­i­fi­ca­tion in sev­eral na­tional par­lia­ments.

Back in Greece, the main op­po­si­tion cen­tre-right New Democ­racy party, an un­likely ally to left­ist Tsipras, said that it was sat­is­fied with a deal reached be­tween Syriza-led gov­ern­ment and Greece’s in­ter­na­tional lenders. New Democ­racy MP Kyr­i­akos Mit­so­takis, tweeted that Greece had a great chance now to be­come a nor­mal Euro­pean coun­try.

“We have 3 years to be­come a nor­mal Euro­pean coun­try. I hope we have learnt from the mis­takes of the past. Let’s make a new be­gin­ning!”

Ado­nis Ge­or­giadis, also a mem­ber of New Democ­racy who has strongly crit­i­cised the Greek premier in re­cent months, said that Tsipras fi­nally chose to fol­low Greece’s in­ter­ests.

“De­spite the mis­takes and the dam­age he pro­voked, at the end [Tsipras], be­tween Greece and Syriza, he picked Greece. History will credit that to him.”

How­ever, there were also harsh words of crit­i­cism to­wards the EU’s main pay­mas­ter.

Anti-aus­ter­ity economist Jeffrey Sachs said that Eu­ro­zone “was right to avoid sui­cide but the real tests are open­ing the banks, im­ple­ment­ing mea­sures and debt re­lief.

Chan­cel­lor An­gela Merkel said that the Ger­man par­lia­ment will only be called once the Greek par­lia­ment agrees on the pack­age.

Prom­i­nent economist and No­bel lau­re­ate Joseph Stiglitz ac­cused Ger­many ear­lier on Sun­day of dis­play­ing a “lack of sol­i­dar­ity” with debt-laden Greece that has badly un­der­mined the vi­sion of Europe.

“What has been demon­strated is a lack of sol­i­dar­ity by Ger­many. You can­not run a eu­ro­zone with­out a ba­sic mod­icum of sol­i­dar­ity,” Stiglitz said.

The Eurosum­mit may have ended with agree­ment, but an­a­lysts say any­thing can go wrong as ap­proval of na­tional par­lia­ments is still needed for the ESM pro­gramme to be­gin.

Eurogroup Pres­i­dent and Dutch Fi­nance Min­is­ter Jeroen Di­js­sel­bloem said he hoped that by the end of the week there will be for­mal man­date to ne­go­ti­ate the Greek bailout, but a fi­nal deal is still weeks ahead.

Di­js­sel­bloem said that EUR 25 bln will be used to re­cap­i­talise Greek banks and con­firmed that the Eurogroup will dis­cuss bridge fi­nanc­ing for Greece.

He added that the Eurogroup of Eu­ro­zone fi­nance min­is­ters could have a con­fer­ence call Wed­nes­day, and then the na­tional par­lia­ments could ap­prove the deal.

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