Eurozone creditors reached a deal with Greece on Monday, to avoid the country’s exit from the Euro, and to “resolve Greece’s debt crisis,” in exchange for stricter austerity measures.
The deal, which is Greece’s third bailout package in the last five years, is awaiting the approval of Greece’s parliament, and sharply contrasts last week’s referendum, where Greek citizens voted to reject any bailout deal that would require further austerity.
While Greek Prime Minister Alexis Tsipras promised to reject further austerity when he came to power in January, the new bailout package will leave Greeks faced with even more rigorous measures than before.
The Guardian reported that after “31 hours of acrimonious discussions spread over one tense weekend,” the 19 leaders of the Eurozone came to an agreement that would require Greece to introduce “controversial economic reforms” and to sell off 50 billion Euros worth of state assets, “with the proceeds earmarked for a trust fund supervised by its creditors.”
Donald Tusk, the president of the European Council, took to Twitter to write that summit leaders had reached a unanimous agreement, which would require “serious reforms” in exchange for “financial support.”
EuroSummit has unanimously reached agreement. All ready to go for ESM programme for #Greece with serious reforms & financial support
— Donald Tusk (@eucopresident) July 13, 2015
The New York Times reported that when speaking to reporters following the announcement of the deal on Monday, Tsipras “tried to put a positive spin on what might be seen as an almost total capitulation by Athens to creditors’ demands for tough austerity,” and said that the Greek government “assumed the responsibility of averting the extremist ambitions of the most conservative circles in Europe.”
“We gave a tough battle for six months and fought until the end in order to achieve the best we could, a deal that would allow Greece to stand on its feet,” Tsipras said. “We faced hard decisions, tough dilemmas.”
While French President Francois Hollande said that losing Greece from the Eurozone would be like losing “the heart of our civilization,” the president of the Eurozone finance ministers, Jeroen Dijsselbloem, said that the Greeks “have to show they’re credible, show that they mean it.”
The Associated Press reported that before Greece can receive 85 billion Euros, or $95.07 billion in bailout funds, the Greek government “will have to pass a raft of austerity measures that include sales tax increases, reforms to pensions, and labor market reforms.”
While Greek banks are expected to remain closed this week, requiring emergency loans in order to reopen, the New York Times noted that the European Central Bank is “unlikely to provide additional emergency cash,” until the Greek Parliament agrees to the bailout package.
The Guardian reported that the European commission, International Monetary Fund and European Central Bank asked Greece to come up with a “plan to ‘de-politicize’ its civil service by next Monday,” and that the country could be forced to reverse any measures deemed “counter to the bailout philosophy” which could leading to the firing of the “government cleaners that Syriza rehired with such fanfare.”
The Associated Press noted that while Greece has received two previous bailouts, totaling 240 billion Euros, or $268 billion, “in return for deep spending cuts, tax increases and reforms from successive governments,” Greece’s debt has continued to increase, “as the economy has shrunk by a quarter.”