Cameron: Euro deal offers the best hope for Greece
Protests as Tsipras agrees to push through tough austerity measures
THE deal which saw Greece pull back from economic collapse will offer the best chance of stability for the country in the euro, according to Prime Minister David Cameron.
With his country teetering on the brink of bankruptcy, Greek Prime Minister Alexis Tsipras agreed to push through a draconian new austerity plan as the price of remaining in the single currency.
There were protests on the streets of Athens, with anger among Greeks particularly directed at the Germans who had inflicted austerity measures on the country. Anti-EU protesters burned a leftist Syriza ruling party flag during a demonstration of about 500 people in front of the parliament building in the capital.
The country’s banks will remain shut until at least tomorrow, the Finance Ministry confirmed, extending a two-week shutdown.
Greece imposed capital controls, rationing cash to a daily ATM withdrawal limit of 60 euros (£42) after the huge numbers of people trying to get money out threatened to overwhelm the system.
Following talks which lasted from Sunday into Monday in Brussels with the leaders of the 19-nation eurozone bloc, Mr Tsipras said he had managed to fend off the “most extreme measures” demanded by Greece’s creditors.
He must now win the backing of the parliament in Athens for fresh pension, market and privatisation reforms less than two weeks after the Greek people overwhelmingly rejected further austerity in a referendum.
Mr Cameron said it was in Britain’s interest that the deal was now properly implemented. He added: “What’s in Britain’s interest is that there is stability in the eurozone and there aren’t the threats of uncertainty and instability. And I think this deal gives that sort of stability a chance. But obviously there is a long way to go to put into place all the things that have been agreed.”
Chancellor George Osborne added: “I think that Britain can give a cautious welcome that the eurozone has stepped back from the brink because it is pretty clear that these problems in Greece and across Europe have an impact on our economy.
“What we really want to see now is this turned into a lasting solution because this risk from Greece hangs over the whole European economy, including Britain.”
German chancellor Angela Merkel warned that trust needed to be rebuilt between the radical left Syriza government and the rest of the group. “Greece has a chance to return to the path of growth,” she said, adding: “It will be a long road.”
“There are strict conditions to be met. Nevertheless, the decision gives Greece the chance to get back on track with the support of European partners,” Donald Tusk, president of the European Council said. “It also avoids the social, economic and political consequences that a negative outcome would have brought.”
Mr Tsipras – who was forced to accept a series of politically unpalatable measures to prevent his country crashing out of the eurozone – said: “Greece will fight to return to growth and to reclaim its lost sovereignty. We took the responsibility of the decision to be able to avert the harshest outcome. We managed to avert the demand to transfer Greek assets abroad, to avert the collapse of the banking system.”
The agreement to begin talks on Greece’s third bail-out in five years allows the European Central Bank (ECB) to continue providing the emergency liquidity to the Greek banks which is keeping them from collapse.
However, Mr Tsipras may pay a high price for the deal which is likely to be opposed by many on the left of his party, which was swept to power on an anti-austerity platform. Greece’s junior governing coalition partner said it could not support bailout proposals from lenders, but signalled it would remain in Prime Minister Alexis Tsipras’s government.
Panos Kammenos, leader of the Independent Greeks party said: “The agreement speaks of 50 billion euro worth of guarantees concerning public property, of changes to the law including the confiscation of homes... We cannot agree to that.” EUROZONE leaders have reached a tentative agreement on a new bailout deal for Greece. Q: Why did the negotiations take so long, and who won? A: Greek PM Alexis Tsipras has pushed the eurozone to the brink of a rupture in a bid to secure the best deal for his country. Having been elected on an anti-austerity platform, Mr Tsipras went as far as holding a referendum to reject one supposedly “final” offer from the currency group and other creditors relating to the final tranche of a previous bailout. His tactics may have backfired — as with the Greek financial system perhaps just hours from collapse, the premier was forced to accept a package that many regard as harsher in return for a fresh loan. Q: So is Grexit over? A: No. The Greek parliament could refuse to pass tax rises and tough reforms to pensions, labour markets and nationalised industries by the deadline of tomorrow. The mooted loan of £60 billion from the eurozone’s emergency fund would then disappear — and the country could go bust and exit the currency. Even if the deal does hold together in the shortterm, there is a danger that politicians are merely “kicking the can down the road” unless there is a restructuring of debt. Q: What has it done for the euro’s chances of survival? A: The currency’s reputation has suffered, with the weaknesses in its structure and rules cruelly exposed. Grexit could have posed an existential threat to the project, and it was crucial for the other member states to show the political will to hold things together. Q: Does Britain have an interest in this episode? A: The UK is outside the eurozone, and is not liable for any losses by the ECB. UK banks and financial institutions also have limited direct exposure to Greek debt. Failure to reach a deal would have risked crashing stock markets, financial contagion and an economic slowdown in euro states — all of which would have been damaging to the UK.
‘‘ What’s in Britain’s interest is that there is stability in the eurozone and there aren’t the threats of uncertainty and instability