Greece granted bailout extension

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By the end, the hacks seemed almost as exhausted as the politicians.Given the protracted nature of Greece´s negotiations, it is hardly suprising that talks went right to the wire. The announcement of an agreement between Greece and its creditors on Friday evening came as a relief to everyone involved- an 11th hour stay of executuon for the Greeks amid fears that capital controls in the country´s banking system were just days away.

Friday´s Eurogroup negotiations were a familiar blend of chaos and tension, leading many to fear that the meetings would break up once again without agreement.

The Eurogroup meeting was scheduled to start at 3pm, but delays built up as neogtiaions between some of the key actors got under way. More than one hour after the scheduled start time, the Eurogroup President, Jeroen Dijssebloem, arrived to tell a hungry press pack that there was huge uncertainty about the prospects for a deal.

“We have a Eurogroup meeting which will start as soon as possible but I have to tell you that is quite complicated. So I’m talking to the main players and trying to find solutions”, Dijssebloem explained.

A Greek Goverment source confirmed the sense of uneasiness communicated by the Dutch minister.

“We are waiting for the Eurogroup to begin without any specific indication about the time”, the official said.

The main players held preparatory talks in various formats involving German Minister, Wolfgang Schaeuble, his Greek counterpart, Yanis Varoufakis. Dijsselbloem and Christine Lagarde, managing director of the International Monetary Fund, also attended, but the composition of the meetings changed throughout the afternoon.

Once those multilateral talks finished, the Eurogroup meeting meeting began with smiles and even included a gift from the IMF party to Dijssebloem. A small bag of chocolate M&Ms were intended to sweeten the discussions in the hope of a positive outcome.

A common text between Greece and its international lenders was eventually announced, with the document endorsed by the Germans. The draft formed the basis for an agreement to extend Athens’ bailout package according to an EU official.

Greece will have to submit proposals for the extension on Monday, entailing a  detailed plan about the country´s reform and debt obligations over the next four months. The loan is conditional on the agreemeent of “the institutions” –the new word which has replaced the troika at Greece´s insistence- and Varoufakis acknowledged that should these proposals not be in line with the instituions positions -“we are finished.”

The Greek government has also agreed  to “refrain from unilateral action” and has agreed to the full completion of the existing bailout programme. The precarious nature of the country´s finances-most notably the banking sector-have forced the Government into the climbdown, and while Athens has had to make significant concessions, Varoufakis can be pleased that he has managed to wring some concessions of out what looked to be a no-win situation.

Indeed the Greek Finance Minister was bullish about the deal his side had negotiated: “ We will no longer be using a script given to us from outside agencies,” adding that previous Greek governments had failed the Greek people in not driving a harder bargain with the country´s creditors. In effect, Varoufakis views the deal negotiated as a means of clawing back some of the sovereignty Greece has lost since the onset of the crisis. The scope of that economic sovereignty remains to be seen, given the stringent conditions attached in the deal.

Dijsselbloem said “this evening was a first step, a successful step, but there is still a long way to go.” Asked on the possibility that Monday´s proposals will not meet requirements, he replied:“I do not work off that assumption. I work off the assumption that the Greek government is very serious about getting cooperation back on track. They will work very hard on getting a first list together of the type of reforms that they want to take on, and I think that will be the starting point of a new process-a reboot of our cooperation.”

Schauble was rather less concilliatory in tone, saying “  The Greeks will certainly have a difficult time explaining the deal to their voters. Being in Government is a date with reality, and reality often is not as nice as a dream,” He also reiterated that there would be no payout in funds to Greece unless the existing programme was implemented in full.

Monday should be less dramatic,but the onus remains on Greece to deliver acceptable proposals.Crisis averted-for now.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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