Negotiations ran through the night in Brussels resulting in foundations being set for a new Greek bailout deal.
Over 16 hours of talks between Eurozone leaders ended with a tweet from summit chair and EU president Donald Tusk, stating that there had been unanimous agreement on a programme that included “serious reforms” and “financial support”.
During the following news conference, Mr.Tusk described the plans as an “agreekment”, however there is a clear lack of trust on the creditor side as German Chancellor Angela Merkel said everything will need “rebuilt”, a feeling shared by many other Eurozone leaders.
Details from the finance package presented are yet to be fully released, but it includes the creation of €50bn asset fund set aside by Greece.
This huge fund would be partly used to help recapitalise the Greek banks.
Greek Bailout Issues
Yet, the deal in Brussels still faces a number of issues if the deal is to continue in its implementation.
These include a Greek parliamentary vote to approve the package by the end of the week.
Support for the deal, including more austerity, would then allow other national parliaments to undertake their own votes – allowing bailout talks to progress.
However, the tough conditions imposed by international lenders could still have the potential to bring down the Greek government and the deal to save them.
Before the terms were even known, Greece’s Prime Minister Alexis Tsipras labour minister criticized the terms on state television.
Publicly-owned firms will make up the asset fund and will be sold off. This is a privatisation programme fiercely opposed by members of the governing Syriza party.
This would mark the third bailout in Greek EU history. An EU statement claimed that up to €86 Billion (£61 Billion) of financing could be passed Greece’s way over the next three years.
Greek banks have been closed for a fortnight with cash withdrawals limited to €60 per day.