After 17 hours of marathon talks, the eurozone leaders have reached an agreement over a third three-year bailout for debt-ridden Greece worth around €82-86 billion, which averts the risk of the country leaving the eurozone.
Greek debt crisis: EU leaders struggle to reach
bailout compromise LIVE UPDATES
In his twitter account the President of the European Council
Donald Tusk said that agreement on Greece was reached
“unanimously”. All of the key participants in the
talks acknowledged that the deal means a so-called Grexit was no
longer on the agenda.
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 program will affect
the overall pension reform, reform of the product markets,
privatization and changes in labor exchanges, said German Chancellor Angela Merkel
after the eurozone summit Monday.
“We have been long engaged in the matter of the size of the
program, which is very significant – from €82 to €86 billion over
three years,” she said at a news conference.
A write-off of Greece’s debt is not on the agenda, she added.
READ MORE: Greece asks for new 3yr loan, promises
reform plan on July 9
“It has been agreed to
start negotiations on an (European Stability Mechanism) ESM
program, which means continued financial support for
Greece,” said
Tusk. “The decision
gives Greece the chance to get back on track with the support of
European partners,” he said, adding there would
be“strict
conditions.”
Finance ministers will as a matter of urgency discuss how to
help #Greece meet
her financial needs in the short term (bridge financing).
— Donald Tusk (@eucopresident) July
13, 2015
Greece agreed to set up
a €50 billion fund to repay its debt, said Eurogroup President
JeroenDijsselbloem.
“The target size of the fund, which will accumulate assets of
Greece, will be €50 billion, and it will be based in Greece. This
will create a fund to which funds will be transferred, which will
then be monetized through their privatization or commercial use.
The fund will be aimed at solving the debt problem, or debt
reduction, and it can be used to recapitalize banks,” said
Dijsselbloem.
READ MORE: Russia mulls direct energy supplies to
Greece in near future – energy minister
The problem of the recapitalization of banks is one of the key
challenges for the eurozone, according to Dijsselbloem. This will
require about €25 billion, half of the €50 billion fund, he
added.
My remarks following the #EuroSummit
on #Greece:
http://t.co/V1FaPgHkpu.
#aGreekment
— Donald Tusk (@eucopresident) July
13, 2015
The European Commission will provide the Greek economy with €35
billion in investments, European Commission President Jean-Claude
Juncker added.
The Greek parliament has
to approve all the reform laws by July 15 in order to receive the
aid, said Dijsselbloem. The final conclusion of the negotiations
on the development of the third program of aid to Athens will
require a few more weeks, he added.
The markets and the euro started growing after the Greek
agreement. A composite Stoxx Europe 600 Index grew by 1.1 percent
at the opening, with the euro rallying to $1,1147 from a Friday
reading of $1,1162.
Greece drama ends, Markets at day’s high. Bank Nifty zooms.
@BloombergTVInd@PriyalGuliani@PriyankLakhiapic.twitter.com/52A7QpjBEG
— Geetu Moza (@Geetu_Moza) July
13, 2015
The results achieved at
the eurozone summit allow Greece to return to the path of growth,
Merkel commented at a press conference after the meeting.
“All in all, the
advantages outweigh the disadvantages…I think that Greece has a
chance to return to the path of growth,” Merkel said.
“We’ve made a good step to
build confidence, but there [are] still a lot of steps to
implement the achieved,” says IMF Chief Christine
Lagarde.
The agreement is
complex, but Greece avoided the transfer of its state property
abroad, as well as financial strangulation and destruction of the
financial system, Greek Prime Minister Alexis Tsipras
commented.
Last Thursday Tsipras
submitted a new reform plan to its so-called
troika of creditors – the IMF, the ECB and the European
Commission. When bargaining over a new deal, the PM was asking
for a €53.5 billion bailout package over the next three
years.
The Greeks voted 61
percent against a bailout package of new austerity measures
at a national referendum on July 5. It put Greece on the verge of
leaving the eurozone, hastened negotiations, and led to the
resignation of Finance Minister Yanis
Varoufakis.