The Greek government must approve the first steps on Wednesday July 15 at the latest. And the first words that speak of a reversal of the current Executive occur.
white smoke of time. Greece and other countries in the euro area have agreed to begin negotiating the third bailout of the country.
The president of the European Council, Donald Tusk, certified in his Twitter account, and then at a press conference, the agreement “unanimous”. The President of the European Council announced that eurozone leaders have reached a “unanimous agreement” to begin negotiations for the third bailout for Greece. Tusk, in a message on the social networking site Twitter, said “everything is ready to take the European Stability Mechanism (ESM) program for Greece, with serious reforms and financial support.”
Of course, the Greek government must approve the first steps on Wednesday July 15 at the latest. And the first words that speak of a reversal of the current Executive occur. Labour Minister Panos Skurletis, announced that early elections will be over this year, and until then either be a broad coalition government or specific support of the opposition will seek to implement the reforms agreed with the eurozone.
The Prime Minister, Mariano Rajoy, has also used the social network to announce the deal. “We just finished, no agreement. I hope that everyone satisfied. We must improve governance in the EU”, said the Spanish president.
This expected agreement has known few minutes before opening markets in Europe. The Ibex 35 has released the session with a rise of 1.5 percent surroundings. While in the debt market, the Spanish risk premium falls to 115 basis points level with the profitability of the Spanish ten-year bond at levels of 2.11 percent.
The euro area and the Government of Alexis Tsipras negotiated with an eye on the clock set a tentative agreement that would allow Greece to avoid the financial collapse of today and the draft agreement on the table kept on Athens sword of Damocles of a bankruptcy and even a possible exit euro. The agreement for a third rescue seemed nearer now than at the beginning of the night, with the Greek government willing to accept the conditions of the German Chancellor Angela Merkel and French President Francois Hollande, who then move on to other European leaders .
The lower confidence in the Greek government after the referendum last Domimgo wielded by creditors resulted in a twist on the requirements for granting a bailout now valued at 86,000 million euros.’
The position of Tsipras
Alexis Tsipras claims to have accepted the agreement to avoid the most extreme plans Hawks euro area (ie, Germany), but has faced difficult decisions. The Greek prime minister has said that the agreement will allow the country to return to growth and has ruled that “necessary radical reforms” to drive institutions to the old oligarchy.
The problems to reach the agreement were two. First, the IMF’s participation in a new program from 2016, whose concession partners also want to determine the financial contribution from the institution, a “prerequisite” that Athens rejected.
The second problem, creating a trust fund to which public assets Hellenes would move to privatize and achieve up to 50,000 million euros in the long term to reduce Greece’s debt. Greece rejects this idea promoted by Germany, according to sources of the Greek Government.
Once the agreement is reached, from which the final draft is unknown, Athens would have a short time, until 15 July to adopt the most urgent reforms in tax and pensions, a sacrifice that creditors require the Executive Tsipras as a condition to start negotiating a third rescue.
The offer of the euro zone can be lethal to the Greek Prime Minister last Friday and suffered in the Greek Parliament a handful of defections in the approval of its proposal to creditors. Some European delegations did not hide his desire to get rid of once Tsipras has already disappeared from the scene his first Finance Minister Yanis Varoufakis.
The draft agreement includes ministers only minimal concessions that could save to Tsipras: the promise of a renegotiation of the debt, to extend the repayment and grace periods on loans. But trading only begin once Greece has passed the first test of the third rescue, a period which in the best of cases will not arrive until the fall. Except that loophole, the rest of the document is a blow to the waterline of the Greek government.
The ultimatum was made by the finance ministers of the eurozone (Eurogroup) in two meetings over weekend (almost nine hours on Saturday and five hours on Sunday). The document was drafted in sharp and peremptory terms, as evidence of the unconditional surrender that the Eurogroup requires the government of Alexis Tsipras after the challenge of the referendum on July 5.
Tsipras achieved a resounding success that day , with 61% of votes against the ultimatum of the troika (EC, ECB and IMF) in late June. But in Brussels Tsipras can pay dearly for their victory condemned to choose between leaving the euro or an agreement with tougher conditions before the consultation.
Humiliation
For some delegations The Eurogroup slashing humiliation in Greece and in recent times has come to evoke the Treaty of Versailles (when Berlin accepted the armistice after World War) as dangerous precedent for a deal that could end up being counterproductive.
But German Finance Minister Wolfgang Schaeuble, was not impressed by references to German dramatic past and was adamant. Schäuble was seconded by some of his colleagues, like the Dutch, Finnish, Estonian, Latvian and Lithuanian, and managed to incorporate into the draft document the toughest proposals such as the requirement that Athens believes a background of public assets, worth up to 50,000 million euros, which will be sold to repay the debt.
The revenue from that fund, if fulfilled, would cover more than half of the new bailout, the bill, as the Eurogroup, will range between 82,000 and 86,000 million euros, a quarter of a billion added to the first two and unsuccessful rescues. Only until August, Greece needs 12,000 million euros to avoid bankruptcy.
Greece sees two issues to be resolved, said the first participation of the IMF on a new program from 2016, the granting of which partners want also condition the financial participation of the institution, a “prerequisite” that rejects Athens, Greek sources pointed Executive.
The second is the creation of a trust fund to which public assets Hellenes would move to privatize them achieve up to 50,000 million euros in the long term to reduce Greece’s debt.
The Eurogroup document was transferred to the extraordinary summit of the eurozone held right after. Some sources were confident that Angela Merkel, it relax the tone set by his finance minister. But German cancilller not show much more tolerant.
“We have already lost the most important currency is confidence,” said Merkel before the start of the summit. And he warned that “there will be a deal at any price.”
The Greek prime minister, Alexis Tsipras, arrived with the white flag. “We can reach an agreement if the parties want,” he said before meeting with Merkel, French President Francois Hollande and President of the European Council, Donald Tusk.
Tsipras, however, could be in difficulties in its parliament to approve a plan with measures not only contrary to its political, but also away from the European economic tradition program. The draft agreement requires, for example, the privatization of the electricity grid, which is under public control (as in many countries, such as Spain and France), or maintain restrictions on collective bargaining between employers and workers.
The Eurogroup also calls on Greece peculiar measures such as the revision of the policy of trade liberalization on holidays (a taboo in countries like Germany or France), the reform of the calendar or a calendar discounts on reforms in sectors such as bakeries and distribution of dairy products.
The ministers warned Athens that all these conditions are the minimum to start negotiating the ransom third requirement, but do not rule out the loan program is not adopted then not an agreement on the final Memorandum of Understanding is achieved.
The Eurogroup declaration of war to Tsipras concludes with the warning that “if there is no agreement, Greece will provide a quick negotiation for a temporary exit from the euro zone, possibly including debt restructuring “.
The tone of the threats frightened even some European leaders in recent weeks had also toyed with the idea of Grexit or Tsipras dismissal. Avoid humiliation “, recommended yesterday, for example, the President of the European Parliament, Martin Schulz, after asist to the first session of the extraordinary summit of the eurozone. Schulz, German socialsita, had been targeted in recent days the toughest thesis Schäuble, but yesterday, bottomless, trying to distance themselves from the threat of Grexit. “No one wanted to get to this point, but we’re here,” he said with resignation. “Best stay calm, because decisions taken tonight will mark the future of Europe and will affect millions of people.”
A fund to repay debt
Among the requirements to Greece raised by Berlin, it is not known if it is recorded in the final agreement is the creation of a trust fund of 50,000 million in public assets to contribute to the repayment of its debt. Germany no longer trusts the privatization plans proposed by Greece, which have failed since the start of the rescue. In 2010, the troika (EC, ECB and IMF) plan aimed marked grossing 50,000 million in 2012, it lowered to 23,000 million euros until 2022. And the proceeds have fallen by 3,000 million euros.
The proposed Berlin is a place where Greeks fund assets, but with “external and independent” control and “managed by the Greek authorities, under the supervision of the European institutions,” the document agreed by the Eurogroup.
Proceeds from the fund would be earmarked for debt repayment, which in practice would reduce the cost of a third bailout can soar to 90,000 million euros.
second bailout, Berlin and Athens forced to establish a bank account for the resources reinforced by the euro zone to repay their debt. Now, control is extended to the proceeds derived Athens with its privatization.
The Greek government refused last night to the fund were under foreign control. A requirement that the government of Tsipras could be very difficult to pass in the Parliament of his country, where some members see it as a humiliation and
And among them, Greece saw two issues to be resolved. The First, the IMF’s participation in a new program from 2016, whose concession partners also want to determine the financial contribution from the institution, a “prerequisite” that rejects Athens, Greek sources pointed Executive.
In the coming days, Parliament Athens will have to approve pension reforms and increases the tax on the value added that were rejected in the referendum last week.
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