(NY Times) – European Leaders Reach Agreement to Resolve Greek Debt Crisis

By JAMES KANTER and ANDREW HIGGINS
BRUSSELS — European leaders said Monday morning that they had reached a deal meant to resolve Greece’s debt crisis and avert a historic fracture in the Continent’s common currency project.

“EuroSummit has unanimously reached agreement,” Donald Tusk, the president of the European Council, wrote on his Twitter account shortly before 9 a.m. on Monday. The new bailout for Greece would involve “serious reforms” and “financial support,” he wrote.

The deal announced early Monday allows only the start of detailed negotiations on a new assistance package for Greece. But the prospect of a new bailout program was expected to give the European Central Bank the leeway to continue channeling sorely needed emergency funding to Greek banks hollowed out by a long economic slump and the withdrawal of billions of euros in recent months by panicky account holders as the country’s financial crisis worsened.

Riot police stood guard in front of the Greek Parliament, during an anti-austerity demonstration in Athens on Sunday.Greeks’ Anticipation Turns to Anxiety, Then Frustration in Weekend on EdgeJULY 12, 2015
Diners bowed their heads in prayer before eating at the Galini charity’s soup kitchen in Athens. Greece’s fiscal crisis has made many destitute and desperate, and is stretching the resources of charities and government agencies that help the poor.Greece Financial Crisis Hits Poorest and Hungriest the HardestJULY 11, 2015
At a bank in Athens, graffiti made clear the resentment some Greeks have against the Germans’ hard-line economic positions.Greek Debt Crisis Pits Greeks Against GermansJULY 11, 2015
A statue of the goddess Athena in Athens. Greece is struggling to avert bankruptcy.With Greeks Now Ready to Make a Deal, What Can We Expect?JULY 11, 2015
Christina Economou, 59, owns a restaurant named after herself in Hydra.Portraits From Greece as It Endures a CrisisJUNE 23, 2015
The agreement aims to provide Greece with its third bailout package in five years. Tough terms, demanded by Germany and others, are meant to balance Greece’s demands for a loan repayment system that will not keep it mired in recession and austerity budgets, against creditors’ insistence that loans worth tens of billions of euros not be money wasted. Months of testy negotiations, and the inability of Greece to live up to the promises made in its previous bailouts had put a cloud of distrust over the weekend’s discussions.

An accord would end five months of bitter negotiations that raised concerns that Greece would be the first country to be forced out of the euro currency union — a development that proponents of European unity had sought desperately to avoid.

“The advantages far outweigh the disadvantages,” Chancellor Angela Merkel of Germany told a news conference, explaining her decision to accept the deal and recommend that the German Parliament also grant its approval.

“The country which we help has shown a willingness and readiness to carry out reforms,” said Ms. Merkel, referring to Greece.

As part of Greece’s commitments, Ms. Merkel said, a fund will be created to use the proceeds from selling off assets owned by the Greek government to help pay down the country’s debt. That fund would be “to the tune of” €50 billion, she said.

Greece will be required to also seek assistance from the International Monetary Fund and agree to let the organization continue to monitor the country’s adherence to its bailout commitments. The Greek government had resisted a continued role for the I.M.F., seeing the fund’s involvement as unwanted meddling.

The Greek Parliament will also be required to approve the terms of the agreement “without delay,” according to the draft document that was circulating Monday morning. One of the sticking points in the weekend negotiations had been a demand that the Parliament sign off on any deal by Wednesday, but that requirement appears to have been relaxed.

He added that eurozone finance ministers would “as a matter of urgency discuss how to help” Greece meet its short-term financing needs. That appeared to be a reference to ensuring that Greece, which is nearly bankrupt, can make large payments to lenders including the European Central Bank that are due in the coming weeks.

From left, Donald Tusk, the European Council president; Jean-Claude Juncker, the European Commission president; and Jeroen Dijsselbloem, the Eurogroup president, gave a news conference after leaders in Brussels reached a deal to resolve Greece’s debt crisis on Monday. Credit Olivier Hoslet/European Pressphoto Agency

During the marathon negotiation session, Alexis Tsipras, the Greek prime minister, struggled with economic overhauls that were demanded by the creditors but that his left-wing government will find difficult to sell at home — just a week after Greek voters overwhelmingly rejected softer terms in a referendum.

European stocks rose and the bond market calmed on Monday morning just moments after European leaders said they had reached a deal. There was no euphoria, however, as investors waited to see how the tough agreement would be put in place.

Niki Kitsantonis contributed reporting from Athens, and Alison Smale from Berlin.

read more

Leave a Reply