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As it happened: Greece roadmap deal struck

AFP/DPA/The Local · 13 Jul 2015, 15:17

Published: 13 Jul 2015 08:26 GMT+02:00
Updated: 13 Jul 2015 15:17 GMT+02:00

KEY POINTS:

  • Eurozone leaders have agreed on the steps Greece needs to take before talks on a new financial aid programme can begin
  • Greece has until July 15th to pass necessary laws in parliament
  • Other European parliaments, including the Bundestag, will have to agree - which may be a challenge for Angela Merkel to force through
  • 'Bridge financing' for coming days will need to be agreed
  • European Central Bank (ECB) decides not to increase Emergency Liquidity Assistance (ELA)

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15:19 - Merkel's spokesman stressed that "Germany did not stand alone" in hammering out a tough deal to prevent a Grexit with other eurozone members.

"This is an agreement that was reached through hard work over 17 hours by 19 member countries of the eurozone," Steffen Seibert said.

Answering reporters' questions, he rejected the notion that an overbearing "ugly Germany" had pushed through a painful reform package which news site Spiegel Online labelled a "catalogue of cruelties".

Seibert said that many other eurozone leaders had said they "shared the German position", and that Greece's left-wing Prime Minister Alexis Tsipras had defended the deal on Monday morning.

"Germany did not stand alone at any time in any way," Seibert told a Berlin press conference, several hours after the marathon session ended in Brussels.

"The German chancellor, the whole government, acted on the basis of a European conviction and European responsibility," he said.

Commenting on the reform list, he said: "What it says in this agreement, point by point, are steps that other European countries have also applied and which have led to good results in these countries.

There is nothing particularly exotic in there... These are measures from a policy tool-kit that aims to kindle free-market forces and for companies to create jobs if given the right conditions," he said.

15:16 - Spain's anti-austerity Podemos has lashed out at this morning's deal, calling it "a financial coup d'etat" against Greece, The Local Spain reports.

15:06 - Arriving at the finance ministers' meeting this afternoon, Finland's Alex Stubb said that "a lot of people have jumped the gun on this," reminding journalists that there is a lot of "conditionality" attached to this morning's agreement.

"It's up to the Greek government and the Greek parliament to decide" if they will accept the terms necessary for financial aid negotiations to begin, he said.

Stubb, who with Wolfgang Schäuble has been one of the voices most critical of Greece throughout the talks, added that negotiations between finance ministers today about possible bridge financing for Greece to get it through the coming days will be "extremely difficult".

"No country has a mandate to give money without conditions," he said.

15:01 - The European Central Bank on Monday decided to leave its stop-gap credit facility for Greece, known as Emergency Liquidity Assistance (ELA), unchanged at around 89 billion, an ECB spokeswoman told AFP.

The decision by the ECB's board of governors came after eurozone leaders hammered out a bailout package for Greece in marathon talks in Brussels overnight. The institution has kept its ELA cap unmodified since June 27, but last week tightened conditions for Greek banks to access the aid.

14.32 - Patrick Bernau, writing in FAZ, argues that the Greeks have been let off the hook and that the deal has only secured another three years of broken promises and evaded responsibilities:

“The Greek government didn't capitulate,” he writes. “They accepted the conditions and secured 80 billion euros for their country... … They thereby saved themselves the hardest cuts which without these billions would have been necessary.”

“A third bailout package will make the wounds deeper for another three years. North Europe will complain about the credit its giving, the Greeks over the undemocratic process. Europe hasn't chosen the end of the horror, but a horror without end.”

14.05 - This analysis from ARD argues that there is no danger of the Bundestag voting no to talks on a third bailout package because Merkel can rely on support of the SPD and Greens - even though Green leader Cem Özdemir said the talks proved the European capital had moved from Brussels to Berlin.

The report estimates though that about a third of Merkel's own party, the CDU plus partners CSU, are in principal against a new bailout package. But they still admit off-the-record that they will vote with Merkel.

13.50 - Merkel looks like she needs a snooze. No time though, is about to talk to her party parliamentarians back in Berlin.

13.44 - A thought provoking analysis in Die Zeit argues that even though Germany has been successful in pushing through its demands, its uncompromising style has split Europe and will have long-lasting consequences. Headline 'Schäuble has split Europe.'

13.39 - Die Linke are raining on Merkel's parade. Future leader Sahra Wagenknecht tweets "the agreement has destroyed Europe."

Certainly from the left-wing point of view the agreement could be viewed as disaster. FAZ reports Maltese prime minister Joseph Muscat as saying "the Greek government accepted practically everything."

13.29 - FAZ is reporting that the Bundestag could vote on whether to goivethe government a mandate to negoatiate on a further bailout package on Friday. Norbert Lammert, Bundestag President has announced this, but it will only happen if the Greek parliament first votes for the package.

13.24 - Vice-Chancellor Sigmar Gabriel has also commented on the talks before he heads to China. He described the agreed upon steps as a "fair offer." "Without these hard conditions the offer of so much money would not have been responsible," he said.

"I would like to thank the Greek negotiators. we must also respect the fact that the Greek prime minister and his Government made a big step towards the position of the European partners," said Gabriel.

13.11 - Foreign Minister Frank-Walter Steinmeier has just commented on the agreement, choosing to highlight the success of German-French cooperation.

"Europe has shown its in the position to negotiate with rationality and solidarity. We still have difficult steps to make for the bailout package will be realised. Now it is Greece's turn to do the necessary to rebuild trust."

“We wouldn't have achieved this without German-French cooperation. It shows that Germany and France are in the position to find compromises that everyone can live with despite stark differences of interest,” he said.

12:06 - Germany's Social Democratic Party (SPD) - Merkel's junior coalition partners - have welcomed news of the "aGreekment" (as Donald Tusk dubbed it).

"It's good that a common way is being sought in the eurozone," SPD deputy leader Ralf Stegner told Reuters.

But his party colleague Axel Schäfer targeted Wolfgang Schäuble for harsh criticism, saying that the SPD had fought hard to soften the conservative finance minister's position.

"We've had the impression in the SPD that the Finance Ministry has been seeking a solution for months without Greecel," he said.

There was anger within the SPD over the weekend as party leader and Vice-Chancellor Sigmar Gabriel appeared to uncritically support his conversative allies' harsh stance towards Greece.

11:55 - Italian PM Matteo Renzi has said that the all-night negotiations were a time of "great effort and some tension", with moments where it looked like Grexit might be inevitable, The Local Italy reports.

11:30 - Analysts in Stockholm tell The Local Sweden that there is a long way still to go.

"There are huge question marks about the whole euro area. Should a country be able to leave?" SEB analyst Robert Bergqvist told TT.
 
He added that he felt the EU had been "shaken...almost in an existential way" by the crisis in Greece.
 
Andreas Hatzgeorgiou, chief economist at the Stockholm Chamber of Commerce and Greece expert, added: "You should not think that this spells the end of the Greek crisis. It is the end of the most acute phase."

11:19 - It looks like Alexis Tsipras will have a hard time getting anything past the left wing of his own Syriza party:

11:11 - And here's what needs to happen when for Greece to have a hope of more financial aid:

11:09 - Even as Greek bond yields are dropping, German ones are rising - does that mean it's 'a fair deal'?

11:06 - The New York Times has a leaked copy of the full agreement online:

11:03 - Chancellery Minister Peter Altmaier tweets that "despite everything, the French-German [relationship] was once again crucial in the search for a solution and compromise!"

10:57 - The next big moment for today will be at 3pm, when finance ministers will start talks on getting Greece through the days until it gets a real financial aid programme:

10:53 - Peter Spiegel at the Financial Times has a leaked copy of this morning's agreement and has been tweeting extracts:

10:49 - It looks like the bond markets are already pleased with news of the deal:

10:36 - Here's a little more detail on how the Greek privatization fund will work, based on Eurogroup leader Jeroen Dijsselbloem's statement to the press this morning:

  • Aim to include €50 billion of assets
  • Will make money by privatizing the assets or operating them for a profit
  • Will be run by a team of experts under Eurogroup (European finance ministers) supervision
  • Half - €25 billion - used to recapitalize banks
  • One quarter - €12.5 billion - to pay Greek government debt
  • One quarter - €12.5 billion - to stimulate growth and boost investor confidence

10:16 - The Local Sweden looks at the calming effect this morning's news has had on financial markets.

10:11 - Estonia's Prime Minister notes that today's deal is just a 'roadmap' - now Europe will actually have to walk the walk:

10:08 - Some commentators are already expressing scepticism that the deal will even manage to drag Greece out of the economic woods:

10:06 - Spain's Prime Minister Mario Rajoy has denied that Monday's agreement is "revenge" on Greece for bad behaviour.

But he might not be the best person to ask - as many Twitter users are commenting on his apparent exclusion from the talks due to his lack of English:

10:02 - The Greece deal is going to face bitter opposition from both the fiscally-conservative right and the hard left across Europe.

On Monday French left-wing firebrand Jean-Luc Mélenchon - dubbed the Tsipras of France - accused Germany of trying to "destroy Europe for the third time in history" and calling the countries who were against more financing for Greece the "Axis countries".

While Mélenchon accepted the current crisis was hardly comparable to the two World Wars he said accused Germany of displaying the "same mindset, arrogance and blindness" as in the previous instances.

Meanwhile French President Francois Hollande tweeted that "An agreement has been found. France sought it, wanted it. Greece remains in the eurozone. Europe has won".

09:49 - "This is a result, but there's the danger that it's a result that will damage Europe," says Green party leader Anton Hofreiter on N24.

"I fear that at the end of this programme it won't point to the future, but we'll end up speaking of further measures."

09:46 - Alexis Tsipras is now speaking to the press.

"We have taken the responsibility for this position so as to avoid the most extreme consequences came to pass. We've been able to avoid that our public-owned goods are transferred outside the countries and that the banking system collapses.

"We've finally managed to arrive at a restructuring of our debts and a middle-term financing. We are leaving a legacy for the necessary changes in all of Europe, and we will fight to find our way back to growth and win back our lost national sovereignty.

"This is a message of democracy and self-determination we've sent to all of Europe."

09:40 - "I won't compare this to historic agreements," Merkel says when a journalist brings up the Treaty of Versailles. "It's completely in the line of [other agreements] we have and have had."

She will arrange an extraordinary session of the Bundestag, but not "before we know that the Greeks have reached the necessary decisions" - i.e. passed the necessary laws in their parliament.

09.38 - Merkel is very polite about the Greek referendum and Tsipras' negotiation style, saying "there was a great will among the Greek people to remain part of the euro, and the whole process has served to filter that out" - apparently including the referendum.

But she can't resist the occasional dig:

09.37: Merkel says she can't say exactly when the €50bn trust fund will be set up - no date has been set.

09:35 - "Given the long hours, the atmosphere was very practical," Merkel says in a rare moment of levity in the press conference.

"We had a good scaffolding" from the finance ministers' meeting earlier in the day, she adds.

09:33 - Angela Merkel says she won't be calling a confidence vote in the Bundestag - which some saw as a real possibility with dozens of MPs from her Christian Democratic Union (CDU) vowing to vote against any new aid package for Greece.

But she will recommend "with full conviction" that MPs agree to open negotiations, she said.

09.31 - "The basic principles are stuck to... if the reforms are implemented, I believe Greece can get back to normal," says Merkel.

09:27 - Angela Merkel is now speaking to the press.

She says that the deal is for €82 to €86 billion of money for Greece over the coming three years. The Greek parliament must agree to the programme by July 15th before it will come before the Bundestag (German parliament) for a vote.

The €50 billion fund for privatizing Greek state property will partly be used to recapitalize the country's banks and partly to repay the eurozone creditors.

"One can't judge the last six months in Greece as successful," she says in a dig at the present radical left Syriza government of PM Alexis Tsipras.

09:24 - Juncker in response to questions about the #ThisIsACoup hashtag which took Twitter by storm on Sunday night:

"In this compromise there are no winners and no losers. I don't think the Greek people has been humiliated, and I don't think the other Europeans are losing their face. It's a typical European arrangement."

09:21 - European Commission President Jean-Claude Juncker has said that there will definitely be no Grexit.

He had told journalists last night that he would fight "until the last millisecond" to reach a deal.

09:14 - EU Council President Donald Tusk has told journalists in Brussels that eurozone finance ministers will now discuss urgent 'bridge financing' to keep Greece afloat until a new financial aid programme is reached.

But as he refers to here, there are "national procedures" - i.e. votes in some eurozone countries' parliaments - to get through first, including the German Bundestag.

09.13 - Spain’s Prime Minister just tweeted: “We have just finished, there is an agreement. I hope that everyone will comply. We must improve governance in the EU.” [09:14:10] Jess Jones:

09:06 - BILD reports that an agrement was reached over the sticking-point of a trust fund that hardliners demanded should privatize tens of billions of Euros of Greek state property.

Citing European diplomats, the tabloid reports that an agreement was reached between Greek PM Alexis Tsipras, Chancellor Angela Merkel and French President Francois Hollande in a side meeting early on Monday morning.

08:57 - It appears there is now a deal in Brussels after eurozone leaders began tweeting that agreement had been reached. Both the Belgian and Maltese Prime Ministers announced the news on Twitter:

As yet there are

08:00 - After a gruelling 15-hour negotiation, eurozone leaders were close to an agreement on Monday morning on a way towards new financial aid for Greece – but a German demand for massive privatizations remains the sticking point dividing Europe.

Greek Prime Minister Alexis Tsipras continues to resist Wolfgang Schäuble, who has led those insisting on a move to sell off €50 billion of his country's state-owned property and companies through a trust fund.

He's also keen to find a deal that wouldn't involve the International Monetary Fund (IMF), preferring to keep things among European partners.

But he faces a tough crowd among those countries – led by Germany – who have lost patience with Greece, as Chancellor Angela Merkel declared on arriving in Brussels that there wouldn't be a “deal at any price.”

Eurozone leaders met in Brussels at 4 pm on Sunday and have been alternately speaking at a round table with all 19 countries in the single currency and breaking off for one-on-one negotiations.

Chancellor Angela Merkel met with Tsipras, French President Francois Hollande – who has in recent days become much softer towards Greece in comparison with Germany – and European Council president Donald Tusk early on Monday morning to try and find a way through the deadlock.

Tsipras' radical left Syriza government made an application for help late last week from the European Stability Mechanism (ESM), asking for loans of €74 billion over the coming three years.

Greece's government has agreed to much tougher conditions in exchange for aid than were included in the austerity package rejected by Greeks in a referendum last weekend.

But over the weekend a bloc of fellow eurozone countries – Germany foremost among them – have continued to insist on Greece meeting tough conditions before they even consider helping.

DON'T MISS: What ordinary Germans think of the Greece crisis

Finance Minister Wolfgang Schäuble even suggested that Greece might have to leave the eurozone “temporarily” in order to clean up its act and apply to rejoin.

Former Greek finance minister Yanis Varoufakis alleged that had been Germany's plan all along late on Sunday night, saying on Twitter that he would explain further in German media this week.

But that was rejected by the countries, led by France, who are more sympathetic to Greece, with Hollande saying that “either Greece is in the eurozone, or Greece is not in the eurozone”.

“France will do everything in its power to find a deal.”

SEE ALSO: Greece faces D-Day as bailout talks resume

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AFP/DPA/The Local (news@thelocal.de)

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