After 26 hours of negotiations, an agreement on a series of economic measures has been reached between debt-ridden Greece and eurozone leaders, paving the way for a third financial bailout deal. The agreement prevents a Greek exit from the European Union for the near future and is worth up to €86 billion (NZ$141 billion).
The summit where agreements were made was the longest in the EU’s history, with Greece aware from the outset that leaders on the European stage were unwilling to budge on key points.
The central agreements included the implementation of further austerity measures, the privatisation of energy networks, pension reforms and other measures, which the Financial Times labelled the “most intrusive economic supervision programme ever mounted in the EU”.
The German Chancellor, Angela Merkel, offered the proposal of financial assistance in the form of a bailout to the Greek government in exchange for the surrendering of their fiscal sovereignty. The proposal was described as “utter blackmail” by some of the leading members of Greece’s left-wing governing party, Syriza. It was also widely seen as an affront to democracy — a referendum in Greece on 5 July returned a decisive “no” vote against the austerity-ridden bailout deal, showing a mandate from the Greek people firmly against the measures agreed upon.
The agreements follow the forced resignation of Yannis Varoufakis, Greece’s former finance minister, after Greek Prime Minister Alexis Tsipras said he believed it would be better for him to stand down and allow negotiations to be conducive. However, the resignation is widely believed to have been initiated by European leaders, who were unable to work with the anti-austerity advocate.
Tsipras told Greek TV he acknowledged it was a bad deal but knew it was the best they could manage in the circumstances. Greece’s third bailout deal will help by pumping money into its banking system, which is struggling to withstand cash withdrawals from Greece’s 11 million worried residents. Capital controls remain in place, and banks are still closed, while enforcing a maximum withdrawal limit at ATMs of €60 per person, per day.