Greece, Creditors Agree Last Details of Bailout Deal — European Commission

Former Greek Finance Minister Yanis Varoufakis said Wednesday the latest Greek bailout deal “is not going to work”.

The deal, which will provide Greece with the new money needed to prevent financial meltdown and keep it from crashing out of the single currency, was reached after months of often bad-tempered talks with worldwide lenders. She said the details were expected to be cleared up Tuesday. It could be considered by the eurozone’s 19 finance ministers on Friday – if Greece’s parliament first votes on the plan, which contains some painful tax hikes and spending cuts.

After an 23-hour session that began Monday afternoon, exhausted Greek officials emerged in a central Athens hotel to announce the two sides had agreed details of the deal though a couple of minor issues remained to be ironed out.

He further riled the Germans, the main contributors to a series of rescue packages for Greece, by saying an outline deal last month was like the Versailles treaty which forced crushing reparations on Germany after World War One and led to the rise of Adolf Hitler.

Investors cheered the news of progress. Although the government has agreed to accommodate harsh economic reforms, Greece requires calculated and well-thought policies to come out of the recession, as its economy was pulled in at the beginning of this year.

The Athens Stock Exchange was up 2.2% in midday trading and the government borrowing rates fell.

Greece and its creditors – the EU, the European Central Bank, and the worldwide Monetary Fund – are under pressure to finalise the deal by next Thursday when Athens must repay some 3.4 billion euros to the ECB.

“All the last details have been clarified…”

Adapted from an earlier baseline scenario, the targets foresee a primary budget deficit of 0.25 per cent of gross domestic product in 2015, a 0.5 per cent surplus from 2016, 1.75 per cent in 2017, and 3.5 per cent in 2018, the official said.

An initial 10 billion euros will be made available “immediately” to shore up confidence in the Greek banks, several sources said, while authorities conduct a detailed asset quality review, that is expected to take several months.

Officials had also argued over how to set up a sovereign wealth fund in Greece designed to raise 50 billion euros from privatisations, three-quarters of which would be used to recapitalise banks and to reduce the debt. “Agreement is a big word”.