Monday, 13 July 2015

European Leaders Reach Deal to Resolve Greek Debt Crisis

Euclid Tsakalotos, Greece 's new finance minister, with Christine Lagarde, managing director of the International Monetary Fund, at the eurozone finance ministers meeting in Brussels on Sunday. Credit Francois Lenoir/Reuters
BRUSSELS — European leaders said Monday morning that they had reached a deal meant to resolveGreece’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 & financial support,” Mr. Tusk wrote.
Joseph Muscat, the Maltese prime minister, wrote on his Twitter account “Deal” shortly before 9 a.m. on Monday after 17 hours of talks in Brussels .

The agreement, whose details have not yet been described, aims to provide Greece with its third bailout package in five years. The 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 would not be money wasted

 “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, who was referring to Greece .

Ms. Merkel said a fund would be created to use the proceeds from privatizing parts of the Greek economy to help pay down its debt. That fund would be “to the tune of” 50 billion euros, or about $55 billion, she said without elaborating.
Mr. Tusk later used his Twitter account to write that steps would be pursued “to swiftly take forward the negotiations” on the latest bailout. He added that 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 over the coming weeks.

The deal announced early Monday only allows 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 capital controls and an economic slump.
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.

During the marathon negotiation session, Alexis Tsipras, the Greek prime minister, struggled with economic overhauls demanded by the creditors but which his left-wing government will find difficult to sell at home — just a week after Greek voters overwhelmingly rejected softer terms in a referendum.
Niki Kitsantonis contributed reporting from Athens , and Alison Smale from Berlin .
A version of this article appears in print on July 13, 2015, on page A1 of the New York edition.

No comments:

Post a Comment