Greece Seals New Bailout Deal To Avoid Euro Exit

Brussels, Jul 13 (AFP) Greece reached a desperately-needed bailout deal with the eurozone today after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency.

Greece Seals New Bailout Deal To Avoid Euro Exit
The country's leftist Prime Minister Alexis Tsipras agreed to tough reforms after 17 hours of gruelling negotiations in return for a three-year bailout worth up to 86 billion euros (USD 96 billion), Greece's third rescue programme in five years.

EU President Donald Tusk announced the deal for debt- stricken Greece on Twitter, ending a bitter six-month struggle between Tsipras's anti-austerity government in Athens and the rest of the eurozone.

"EuroSummit has unanimously reached agreement," former Polish premier Tusk said. "All ready to go for ESM programme for Greece with serious reforms and financial support."

Greece applied last week for a third programme from the eurozone's bailout fund, the European Stability Mechanism, after its previous bailout expired on June 30, leaving it without international financial assistance for the first time in years.

Greek banks have been closed for nearly two weeks and there were fears they were about to run dry due to a lack of extra funding by the European Central Bank, meaning Athens would have had to print its own currency and effectively leave the euro.

Athens had infuriated its creditors with actions including a surprise referendum on July 5 in which Greeks overwhelmingly rejected previous bailout terms offered by its creditors.

The full terms of the new deal were not immediately available but they looked set to be even tougher than those originally offered to Greece.

A Greek government official had earlier said the terms drafted yesterday by the euro finance ministers were "very bad", amid concerns they would effectively take control of much of Greek finances away from Athens.

Under terms drawn up by eurozone finance ministers at the weekend, Athens would now have to push through new even tougher laws by Wednesday, Finnish Finance Minister Alex Stubb said.

Athens would have to introduce harsh conditions on labour reform and pensions, VAT and taxes, and measures on privatisation, he added.

Key sticking points included the involvement of the IMF and a call for Greece to park assets of up to 50 billion euros (USD 56 billion) in a fund in Luxembourg for privatisation.

Arriving for what was billed as a last-chance summit yesterday, Merkel said there would be "no agreement at any price", complaining of a loss of trust in Athens.

Tsipras, who was elected in January vowing to end five years of austerity tied to two previous bailouts since 2010, had said a deal was "possible" if all sides were willing.


Read more about: greece
Story first published: Monday, July 13, 2015, 13:15 [IST]
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