Greek deal: 'The only thing they didn't demand was a cure for AIDS'

Richard Edgar

Former Economics Editor

Greek deal: Tsipras caves on key points to agree bailout Credit: Reuters

Peace in our time. Or something like that. After a mammoth weekend of negotiations, Europe’s leaders emerged to an overcast Brussels with news that they have reached agreement on a deal to bail out Greece.

Alexis Tsipras, prime minister of Greece, has caved in on some key points, including:

  • Putting €50 billion of Greek assets into an independently operated fund for debt repayments and recapitalising the country’s banks. This is a significant loss of sovereignty.

  • Allowing the IMF to supervise the programme. The IMF is hated in Greece for imposing austerity and Mr Tsipras had held out for their exclusion.

  • Passing a raft of wide-ranging reforms and liberalisation of the economy and its administration.

In exchange, Mr Tsipras has won a third bailout for his bankrupt country, worth up to €86bn.

He hasn’t managed to get any of Greece’s huge debt written off but, in comments this morning to journalists, the German Chancellor, Angela Merkel said: "The eurogroup is ready to grant longer grace period and longer loan maturities," which would amount to much the same thing in terms of making debt and interest repayments more affordable over the long term.

In exchange, Mr Tsipras has won a third bailout for his bankrupt country, worth up to €86bn. Credit: Reuters

I just spoke to a member of the Greek delegation who has given me some insight into their interpretation of events.

This was the 'second best' outcome for the Greek prime minister, he said, rather sarcastically. "The only things they didn’t demand from Greece," he added, "was a cure for AIDS, peace in the Middle East and to give German tourists in Athens priority."

With such a loss of sovereignty, he reckoned Mr Tsipras’ work was only just beginning as he would have a very tough job getting the deal through parliament in Athens.

Persuading his countrymen and women will have to be done by Wednesday. Only if the law is passed will Germany and other creditor countries ask their parliaments for approval – and the mood in Berlin is still quite hostile. The next few days are going to be very, very difficult.