Greece Has A Deal, But The Crisis Is Far From Over

Al Jazeera’s John Psaropoulos, reporting from Athens, said that the Greek government would have to take tough measures to meet the requirements of the deal, but Tsipras would “put the best possible spin on all of this”. The money for those sales will go into a separate offshore fund which won’t be under the control of Greece.

July 12, 2015: Greek Finance Minister Euclid Tsakalotos, right, speaks with Managing Director of the worldwide Monetary Fund Christine Lagarde during a round table meeting of eurogroup finance ministers at the EU Lex building in Brussels. The deal also includes €35 billion investment from the European Commission into the Greek economy.

Athens had infuriated its creditors with actions including a surprise referendum on July 5 in which Greeks overwhelmingly rejected previous bailout terms offered by its creditors.

European Commission President Jean-Claude Juncker said negotiating the agreement had been “laborious” but the work had now been concluded. “This has proven to be true”, he said.

The package, even more severe than the one rejected by the firm “Oxi (No)” by the Greek people in a referendum a week earlier, seems to serve the interests of the lenders more than that of the Greeks.

The European Central Bank will decide whether to maintain an emergency liquidity lifeline to Greek banks.

But then again, Greece needs a lot of money very fast if it wants to stay in the euro.

Hollande said Paris would do “everything” to keep Greece in the euro and ruled out the “temporary Grexit” proposal. The government will place proceeds from the sale, at Germany’s insistence, into a fund that will be used primarily for paying down debt. The German proposal even suggested that Greece would have to transfer these state assets overseas before they could count as collateral on any further loans. Greek Prime Minister Alexis Tsipras infuriated his European partners last month when he called for a popular vote against economic reforms the creditors has proposed. “It will be based in Greece”, Dijsselbloem said of the so-called guarantee fund. Yet the legislation means Greece “will have to endure significant austerity measures and other types of reforms, all of which are hard to implement, hard to reinforce and possibly hard for the public to accept”.

“It is a compromise”.

Following all-night talks in Brussels with the leaders of the 19-nation eurozone bloc, Mr Tsipras said he had managed to fend off the “most extreme measures” demanded by Greece’s creditors.

Other European officials were less emotive. “It’s a typical European arrangement”. In return, the other eurozone leaders committed to start talks on a new bailout program that should stave off the imminent collapse of the Greek financial system.

As it is, the deal will nearly certainly lead to snap elections.

“The formation of a national unity or special goal government to pass the reforms in the tight time-frame is now required”, said Demetrios Efstathiou, an analyst at Standard Bank. But the deal is just the first step.

Asked whether the tough conditions imposed on Greece were not similar to the 1919 Versailles treaty that forced crushing reparations on a defeated Germany after World War One, Merkel said: “I won’t take part in historical comparisons, especially when I didn’t make them myself”.