– July 5: More than 61 percent of Greeks reject creditors’ bailout terms in a referendum.
Advertisement
“We look forward to working with the authorities to develop their program in more detail and for Greece’s European partners to make decisions on debt relief that will allow Greece’s debt to become sustainable”, said Delia Velculescu, the IMF’s negotiator on Greece in this round of bailout talks. In exchange, politicians must make harsh spending cuts and tax hikes.
Commission head Jean-Claude Juncker said that the past six months of negotiations with the left-wing government of Prime Minister Alexis Tsipras had been hard and testing.
Describing the bailout conditions it as a “comprehensive and ambitious reform package”, Eurogroup chairman Jeroen Dijsselbloem said that “all the intense work of the past week has paid off”. “This is an opportunity”.
The economic situation in Greece has strongly deteriorated over the last 8 months, making fiscal consolidation still quite a challenge in a country that is exhausted of austerity, economists say.
On this basis, Greece is and will irreversibly remain a member of the Euro area.
He said he was satisfied that the Eurogroup was in agreement that nominal haircuts on official debt would not be undertaken.
“This deal – we have never hidden the fact – has many opportunities”. That money that will pay off the European Central Bank on time.
– August 14: Greece’s parliament approves the bailout after an all-night debate. “And finally, it safeguards financial stability; it deals with issues in the banks“.
After some discussion in the Eurogroup, ministers decided that bank depositors would not see funds confiscated as part of a “bail-in” of other creditors. He also said the scope for milder forms of debt relief, like extending debt maturities, was “not very big”, Reuters news agency reported.
Reports in Greece suggest he will seek a vote of confidence in parliament next week, bringing the prospect of snap elections closer.
Mr Tsipras has so far relied on the support of pro-European opposition parties to pass the controversial measures. A first test will be whether Tsipras forms a more stable government, possibly after new elections.
That could mean further uncertainty in Greece and in a wider euro zone economy which data on Friday showed still struggling to meet even modest growth expectations.
But German-inspired fiscal rigour despite continued high unemployment, especially among the young, continues to fuel opposition to European integration.
Mr Tsipras earlier told MPs he does not regret deciding to compromise with creditors and the bailout agreement is a necessary choice.
Advertisement
“Faced with an ultimatum for Greece’s temporary exit from the euro, we assumed our responsibility towards the Greek people to stay alive and keep on fighting, rather than choose suicide”.
