[MGSA-L] Greece wins eurozone bailout deal with strict conditions

[June Samaras]

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http://news.yahoo.com/greece-deal-elusive-risk-rises-145722275.html

Greece wins eurozone bailout deal with strict conditions


Brussels (AFP) - Europe on Friday granted Greece a crucial four-month
extension to its massive debt bailout, ending weeks of tension, but at the
cost of huge concessions including a commitment to spell out reforms within
two days.

The 19 eurozone finance ministers reached the hard-won deal at tense talks
pitting Greece against an angry Germany, suspicious that the new radical
leftist government in Athens was looking to ditch its austerity obligations.

"The meeting was intense because it was about building trust between us,"
said Eurogroup head Jeroen Dijsselbloem, after the talks ended with a
two-page statement setting out the tough conditions Athens will have to
fulfil.

In exchange for the extension, Greece agreed it will submit a list of
economic and other reforms by Monday which its eurozone partners will then
review to see if they go far enough.

On Tuesday, they will report back to Greece and decide whether to proceed
with Friday's agreement, with the chance that the compromise be scrapped if
officials are left unsatisfied.

Greek Finance Minister Yanis Varoufakis said the deal marked a new era for
Athens and its relationship with the European Union, after two painful
bailouts put together at the height of the debt crisis to save the euro.

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A man holds a Greek flag in front of the parliament …
A man holds a Greek flag in front of the parliament in Athens as people
gather in support to their g …
Athens claimed the rescues and the austerity measures it had to follow
since its first 2010 bailout had wrecked the Greek economy, making it
impossible to manage its mountain of debt.

"Today was a pivotal moment because Greece for five years now has been
lonely, isolated in the Eurogroup. Today that isolation has broken,"
Varoufakis said.

However, he warned: "If the list of reforms is not agreed, this agreement
is dead."

Markets reacted positively to the deal, with the Dow and S&P 500 surging to
fresh records on Wall Street as fears of a catastrophic exit by Greece from
the euro receded.

Two previous rounds of talks failed in bitter acrimony amid Greek
accusations that Berlin and other hardline member states were sabotaging a
deal.

"Everything we do is in my opinion for the interest of Greece," said German
Finance Minister Wolfgang Schaeuble, Greece's harshest critic who had
initially rejected Athens' request for a loan extension on Thursday.

"Being in government is a rendez-vous with reality. Quite frequently it is
not as nice as the dream," Schaeuble added.

The specifics of the deal will be a hard read in Athens, especially for
supporters of the ruling Syriza party who had hoped for the end of the
austerity and creditor oversight so loathed by the Greeks.

"The Greeks left behind the memorandum and are becoming the co-author of
reforms and of their destiny," Varoufakis said, referring to the stringent
cost-cutting measures and reforms attached to the original bailout.

But much-criticised oversight by Greece's international lenders will
continue and the government made a firm commitment to freeze anti-austerity
reforms so as to have them first vetted by the eurozone.

At stake for Greece is a crucial financial lifeline that would have
evaporated on February 28 without a deal, including crucial liquidity from
the European Central Bank that is helping keep Greek banks afloat.

If Athens sticks to its commitments, it stands to receive up to 7.2 billion
euros in funds still left in the EU portion of its 240-billion-euro bailout
($273 million).

"Four months is the appropriate delay in terms of financing and future
challenges," Dijsselbloem said.

Up to the very end, the deal with Greece seemed uncertain, with a possibly
chaotic exit from the eurozone always a danger.

Dijsselbloem worked overtime Friday to keep the talks on track as Germany
insisted Greece stick with the austerity commitments included in its
existing bailout programme.

With distrust for Greece widespread among ministers, it was a lengthy phone
call between Greek Prime Minister Alexis Tsipras and German Chancellor
Angela Merkel late Thursday which appeared to make Friday's breakthrough
possible.

European officials said the stand-off had come down to a clash of
personalities with Schaeuble furious at the negotiating style of the casual
Varoufakis, who, in a change, remained markedly sombre on Friday.

After the talks, a key European official said the Schaeuble-Varoufakis
relationship was still fraught.

"The trust just isn't there. (This time) Varoufakis kept a very
low-profile: no waves," the source said.


-- 
June Samaras
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