Eurozone 'agreement' on Greece debt

[Surya Gayatri]

Source: BBC News

Eurozone leaders reach "agreement" with Greece on new debt deal, Belgian prime minister says, after marathon talks.

Breaking - will update

Update:

A spokesman for the Cypriot government, Nikos Christodoulides, tweeted: "Seems we have a deal."

Details of any agreement were not immediately clear. Eurozone leaders have been meeting in Brussels for more than 16 hours.

Update:

Eurozone leaders have reached a "unanimous" agreement after marathon talks over a third bailout for Greece, EU President Donald Tusk has said.

He tweeted that a bailout programme was "all ready to go" for Greece, "with serious reforms and financial support".

Details of the agreement were not immediately clear. Eurozone leaders have been meeting in Brussels for more than 16 hours.

Greece is expected to pass reforms demanded by the eurozone by Wednesday.



Read more: http://www.bbc.com/news/world-europe-33503955

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More here:

http://www.france24.com/en/20150713-liveblog-greece-crisis-summit-tsipras-merkel-hollande-schauble

Live: Greek 'compromise' proposed after all-night talks

The leaders of Greece, Germany, France and the EU reached a "compromise" on a bailout deal for Athens at late-night talks on Monday which will now be put to the rest of the eurozone, EU sources say. Follow the latest on our liveblog.

* The leaders of the eurozone’s 19 members resumed talks at 4am in Brussels on Monday in a last-ditch effort to prevent Greece from being forced out of the single currency.

* Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel, French President François Hollande and summit chairman Donald Tusk proposed a ‘compromise’ agreement shortly after negotiations resumed, a European source told AFP.

[davidpdx]

1. I can see the cartoon now

A picture of Tsipras bent over with his pants down and Merkel standing behind him the caption reading "This won't hurt. Just bend over and cough"

[Surya Gayatri]

2. It's already begun in the morning papers here in France...

Tsipras has just sold the farm. Ceded unprecedented powers to Europe for 'ingérence' in Greece's internal affairs.

And this, after he assured his 'NO' voters that his negotiating position would be strengthened after the futile and expensive referendum.

[davidpdx]

4. The voters are going to be calling for his head on a platter

rightfully so given the referendum. They have many rough years ahead of them, but I hope they learned one thing. Don't count on your European neighbors to bail you out after you borrow money from them, it's strictly business.

[Surya Gayatri]

5. Have they learned that lesson? We'll see...

"Don't count on your European neighbors to bail you out after you borrow money from them..."

[Recursion]

8. What this government gives the next can take away

If the population gets pissed enough to sweep in Χρυσή Αυγή...

[Surya Gayatri]

9. Greece has a long history of overthrows and uprisings.

The weather's hot down there, and so are tempers.

[freshwest]

3. The focus on pensions sound like cutting social security. Tell me, are they culling the herd? n/t

[Surya Gayatri]

6. Apparently, their whole pensions structure is hugely inefficient,

unwieldy and has a very, very bad cost/yield ratio.

It has to be overhauled--whether that will cull the herd, further than it's already been culled during these last three disastrous weeks, remains to be seen.

[Recursion]

7. The previous proposals were to raise and standardize the retirement age

Right now it varies greatly by gender and industry and the troika would like to see it up in the mid-60s and universal like in the rest of Europe.

[JDPriestly]

13. It should not vary by gender. . . unless a lot of Greek grandmothers take care of their

grandchildren and the pensions are less expensive that day-care. I don't know the cultural context.

[Recursion]

18. Yeah I have no idea what the background is there

It may have made sense historically but it's hard to imagine a reason for it to keep going.

[Surya Gayatri]

20. France has more advantageous retirement conditions for certain sectors:

https://en.wikipedia.org/wiki/French_special_retirement_plan

In France employees of some government-owned corporations enjoy a special retirement plan, collectively known as régimes spéciaux de retraite. These professions include employees of the SNCF (national railways), the RATP (Parisian transport), the electrical and gas companies (EDF and GDF) which used to be government-owned; as well as some employees whose functions are directly related to the State such as the military, French National Police, sailors, Civil law notaries' assistants, employees of the Opéra de Paris etc...

The main differences between the special retirement plan and the usual private sector retirement plans are the retirement age and the number of years a worker must contribute to the fund before being allowed a full pension. In the private sector the minimum retirement age is 60, and the minimum number of years of contribution to the retirement fund in order to receive a full pension is 40 years. Employees who are enrolled in the special retirement plan can retire earlier.

[Recursion]

21. Sectors (or at least type of work) I get

A ditch digger retiring younger than an accountant makes a lot of sense to me.

[Surya Gayatri]

23. Agree that workers who do punishing, physical jobs (miners, etc.) should be able to go early...

But, some of the beneficiaries of 'régimes spéciaux de retraite' are just holdovers from an out-moded system of patronage and cronyism. (SNCF, RATP, EDF/GDF).

[jwirr]

32. That does not sound all that bad unless they do not have something for those who are disabled.

Unfortunately disability can happen when you are born.

[Ghost Dog]

10. Euro Down:

[Surya Gayatri]

11. Mainly because of the climate of exteme uncertainty.

Tsipras now has to present this 'package of capitulation' to his fractious parliament for approval.

Far from a done deal.

[Ghost Dog]

12. Greek deal: The highlights so far

BBC 09:33 http://www.bbc.com/news/live/business-33476597

Here is what we know so far:

Today's deal buys time for Greece to negotiate a third bailout.
Greece's parliament will have to vote on today's deal and it's not clear that it will receive the support of Greek MPs.
The current deal contains no reduction in Greek debt but Greece might be given more time to pay back its vast debts.
Eurozone finance ministers will discuss bridge financing for Greece, which would cover Greece's short term needs.
The European Central Bank will have to decide if today's deal is sufficient for it to extend finance to Greek banks to allow them to reopen.
Greek assets will be put into a special €50bn fund of which half will be used to refinance Greek banks. The fund will be run with European oversight.
______

http://www.theguardian.com/business/live/2015/jul/12/greek-debt-crisis-eu-leaders-meeting-cancelled-no-deal-live

The full details of the Greek agreement hasn’t been released yet (but it may leak soon).

But the draft statement in Brussels last night demanded that Greece must immediately take these steps:

Streamlining VAT
Broadening the tax base
Sustainability of pension system
Adopt a code of civil procedure
Safeguarding of legal independence for Greece ELSTAT — the statistic office
Full implementation of automatic spending cuts
Meet bank recovery and resolution directive

So the next few days in Athens will be very intense...

[Ghost Dog]

14. "A worse deal than the 1919 Treaty of Versailles"

Today’s bailout deal comes just eight days after the Greek people comprehensively rejected its creditors’ original demands.

Analyst Marc Ostwald of ADM Investors services reckons the measures in this bailout package are “infinitesimally worse” than the ones turned down in last Sunday’s referendum:

Indeed what is on the table as a deal highlights that:

a) there is no long-term future for the Eurozone;

b) the desire on the part of Eurozone creditor nations to completely destroy the Greek economy - it can certainly be asserted that this is indeed a worse deal than the 1919 Treaty of Versailles.

In terms of a near-term timeline, he says:

a) Tsipras will have to form a new government of national unity as soon as he gets back to Athens
b) By Wednesday 15th, Greece will have to pass laws including simplifying VAT rates, and applying VAT on a wider basis, cutbacks on pensions, and making its statistics agency independent.
c) Once these have been passed, ESM bail-out parliamentary process can commence, and this will require parliaments in Finland, Germany, Austria, Netherlands, Slovakia and Estonia to approve starting ESM talks
d) The Greek parliament will then have to rush through further laws to attain brige financing to pay the ECB on July 20th.

/... http://www.theguardian.com/business/live/2015/jul/12/greek-debt-crisis-eu-leaders-meeting-cancelled-no-deal-live

[Surya Gayatri]

15. Would that Tsipras and Co. had begun serious negotiations on the

basis of the deal that was on the table a month ago.

Futile posturing and blustering to the detriment of the proud Greek people.

[Ghost Dog]

16. The new measures Greece must now implement:

The new measures Greece must now implement

The final Euro Summit statement confirms that Greece has agreed to immediately implement sweeping measures, after a bruising battle in Brussels:

This includes pension reforms, liberalising its economy (from Sunday opening hours to opening up closed professions), privatising its energy transmission network, reforming its labour market practices (including new rules on industrial action, and collective dismissals), and action on non-performing loans:

That is on top of the austerity its MPs agreed on Friday:

Here’s the key points:

- carry out ambitious pension reforms and specify policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause or mutually agreeable alternative measures by October 2015;
- adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, pharmacy ownership, milk and bakeries, except over-the-counter pharmaceutical products, which will be implemented in a next step, as well as for the opening of macro-critical closed professions (e.g. ferry transportation). On the follow-up of the OECD toolkit-II, manufacturing needs to be included in the prior action;
- on energy markets, proceed with the privatisation of the electricity transmission network operator (ADMIE), unless replacement measures can be found that have equivalent effect on competition, as agreed by the Institutions;
- on labour markets, undertake rigorous reviews and modernisation of collective bargaining, industrial action and, in line with the relevant EU directive and best practice, collective dismissals, along the timetable and the approach agreed with the Institutions. On the basis of these reviews, labour market policies should be aligned with international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;
- adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans and measures to strengthen governance of the HFSF and the banks, in particular by eliminating any possibility for political interference especially in appointment processes.

And on top of that, Greece will also establish a new fund to sell off valuable assets to help repay its new bailout, and refinance its banks.

/... http://www.theguardian.com/business/live/2015/jul/12/greek-debt-crisis-eu-leaders-meeting-cancelled-no-deal-live

[Surya Gayatri]

19. Thank you, Ghost Dog, for posting the "small print"

for our information.

[jwirr]

33. Sell off valuable assets - I know what that meant in South America and in Detroit but what will

it mean in Greece?

[Surya Gayatri]

36. Two main targets are the inefficiently run multiple ports and inter-island ferry services

which are in government hands for the moment.

Also, the energy sector. Most of the electricity grid and natural-gas distribution system are publicly owned. Inefficient, costly, and non-competitive.

[jwirr]

37. Thank you. That does not sound so awful as long as they make sure that the electricity and gas

are still affordable to the poor.

In both South America and Detroit austerity meant that they sold the water systems and many citizens could not get water. The results really were horrific.

[muriel_volestrangler]

17. Precise dupe of reply above! (nt)

[muriel_volestrangler]

22. So, this seems to be roughly the deal that the referendum rejected, but with promises

of talks about debt restructuring - and that 'restructuring' sounds more like extending the time for repayment of loans rather than any reduction in principal:

Greece has been promised discussions on restructuring its debts. The German chancellor, Angela Merkel, said the Eurogroup was ready to consider extending the maturity on Greek loans. There is now no need for a Plan B, she added.

http://www.theguardian.com/business/2015/jul/13/greece-bailout-agreement-key-points-grexit

So what lies ahead for Greece in the coming days? Only if Athens ticks all the boxes it has signed up to and implements them in the ambitious timeframe agreed, will eurogroup leaders look at making Greek debt more sustainabile. And even then, it will only involve longer grace periods for Greek debt – a proposal agreed in November 2012.

To avoid any confusion about what was on offer, the German leader added: “We made clear that a nominal haircut is ruled out”.

http://www.irishtimes.com/news/world/europe/merkel-to-athens-now-take-responsibility-for-what-you-agreed-1.2283185

[Surya Gayatri]

24. Given Tsipras and Co.'s erratic and irresponsible

behavior over the last five months, you can see their point.

Only if Athens ticks all the boxes it has signed up to and implements them in the ambitious timeframe agreed, will eurogroup leaders look at making Greek debt more sustainabile.

[cstanleytech]

25. Longer than 5 months actually it was the day they were first given help all the

Greek government did was drag their heels on implementing the changes because they did not want to take the blame for having to do things like actually make the greek people pay their taxes.

[Surya Gayatri]

26. One recalcitrant, incompetent government after the other...

[roamer65]

27. RIP Greece. N/t

[Surya Gayatri]

28. They're amazingly resilient and have bounced back from worse...

http://www.democraticunderground.com/10026966813#post58

The Greek Civil War - 1946–1949. Today's Greeks (by 66.5%) want to stay in the EU and the Euro-zone

in order in part to avoid a replay of this catastrophic, calamitous fratricide. Millions of modern Greeks have very negative sentiments toward the KKE and its role in the bloody strife, having grown up on their elders' tales of the wholesale slaughter.

In a 2008 Gallup poll, Greeks were asked "whether it was better that the right wing won the Civil War". 43% responded that it was better for Greece that the right wing won, 13% responded that it would have been better if the left had won, 20% responded "neither" and 24% did not respond. When asked "which side they would have supported had they lived in that era", 39% responded "neither side", 14% responded "the right wing", 23% "the left wing"; while 24% did not respond.

The Greek Civil War (Greek: ο Eμφύλιος [Πόλεμος], "the Civil War&quot was fought from 1946–49 between the Greek government army—backed by Great Britain and the United States—and the Democratic Army of Greece (DSE), the military branch of the Greek Communist Party (KKE), backed by Yugoslavia and Albania as well as Bulgaria.

The Civil War left Greece in ruins, and in even greater economic distress than it had been following the end of German occupation. Additionally, it divided the Greek people for ensuing decades, with both sides vilifying their opponents.

https://en.wikipedia.org/wiki/Greek_Civil_War#Post-war_division_and_reconciliation

[AverageGuy]

34. Why do they want to stay in the Euro-zone

[Surya Gayatri]

35. Because the bad old days of the yo-yo, monopoly-money drachma are an unpleasant memory...

Their membership in and use of the euro has given them unprecedented access to other EU markets, and vastly facilitated travel and tourism, Greece's N° 2 industry.

Greece would already be over the cliff if it weren't for tourism. It's saving whatever bacon they have left.

[DCBob]

29. I will be shocked if they dont call for elections soon and Tsipris gets thrown out.

He misled the people repeatedly. He's an amateur and got elected by promising things he couldn't deliver.

[Surya Gayatri]

30. Please, please, NOT before some kind of deal can be put into place.

Talk about from frying pan into fire...

[FLPanhandle]

31. Greece will never pay back what they already owe.

And now the EU throws in another $85 billion Euros bailout package.

Greece should be happy with whatever conditions are attached to that money.

This won't fix the underlying problems in the Greek system, it just postpones the inevitable Gr-exit.

[Baclava]

38. Tsipras tackles backlash after clinching Greek deal

Newspapers laced the morning's headlines with references to World War Two and railed against what they see as Berlin's attempts to humiliate Greece as punishment for its resistance to another round of cuts.

"They (the government) were very dynamic at first. We had a glimmer of hope. We were prepared for something bad to happen and then the worst happened. This is what most people think."

http://uk.reuters.com/article/2015/07/13/uk-eurozone-greece-reaction-idUKKCN0PN13W20150713

---------------------

'It's treason!' Greek anger at government u-turn

Greek people have accused the new government of back-tracking from election promises that it would "tear-up" the bailout memorandum, overseen by the so-called "troika" of the European Central Bank, International Monetary Fund and European Commission.

http://www.cnbc.com/2015/02/23/

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"It's another terrible deal. We are not just depressed, we are angry. I don't think this deal is going to help us."

The agreement was hammered out a week after Greeks sent a clear anti-austerity message by overwhelmingly voting "No" in a referendum on conditions offered by international creditors.

As Greeks try to go about their daily lives again today, many are asking where that message went.

http://www.bbc.com/news/world-europe-33509864