Greece: New Deal With Europe Gives Greece A Lifeline

by City A.M. | Economy

A prolonged discussion with Creditors brought something of a cheer to Greeks and an elation to Greek Prime Minister, Alexis Tsipras who greeted the media with two arms raised.

Greek PM Alexis Tsipras greets the media, signalling the cheering news.
(Credit: via City A.M.)

According to Fox News: The president of the European Council  and former Prime Minister of Luxembourg, Jean-Claude Juncker says that Greece and its creditors have agreed on a financial rescue package that includes “serious reforms and financial support” for the Athens government.

City A.M. reports Monday that the FTSE 100 and the euro both have already rallied this morning, after it was revealed that, a 17 hours of negotiations produced results with Greece finally reaching a deal with its creditors.

On Monday Germany's Foreign Affairs Minister Frank-Walter Steinmeier said on the #Greece #agreement: "Europe demonstrates that it can act in a united way based on solidarity and rationality."

City.A.M reports:

Although the details are still sketchy, here's what we know so far.

• The deal should unlock €82-86bn of funds for Greece - that's enough to keep it going for another three years. However, no bailout has actually been agreed yet.
   
• There will be no Grexit - European Commission president Jean-Claude Juncker made that much clear
   
• Greece will have to transfer €50bn of assets to a new fund, although it'll be based in Athens, rather than Luxembourg, as originally mooted by the creditors - one of the sticking points of last night's talks. The proceeds of that fund will be used to recapitalise Greece's banks.
   
• The International Monetary Fund (IMF) will continue to be involved. The IMF's continued involvement was also disputed, but at a press conference this morning German Chancellor Angela Merkel said the IMF's bailout programme will "extend beyond 2016".
   
• This still isn't guaranteed. Greek Prime Minister Alexis Tsipras still needs to pass the proposals in parliament. That's going to be tough - but according to Merkel, he thinks he can do it today.
   
• Greece will now need to discuss bridge financing. Because it may take some time to get through the bureaucracy necessary to unlock the new funds, Greece needs to arrange €7bn of financing to pay the European Central Bank (ECB) money it owes in July and August.
   
• The Eurogroup is ready to grant longer grace periods and longer loan maturities - that's according to Merkel, which suggests creditors were willing to make some concessions for Greece.