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Greece strikes deal with creditors, avoids chaotic euro exit

Published:Monday | July 13, 2015 | 3:22 PM


After gruelling, often angry negotiations that tested the limits of European unity, Greece struck a preliminary rescue deal with its creditors yesterday that should avert an imminent financial catastrophe but also guarantees years more hardship and sacrifice for its people.

Prime Minister Alexis Tsipras flew home to sell the bailout plan to skeptical lawmakers and political allies, some of whom accused him of selling Greece out. Panos Kammenos, leader of the junior partner in Tsipras' coalition government, denounced the deal as a German-led "coup".

"This deal introduced many new issues ... we cannot agree with it," he said after meeting with Tsipras.

Other Greeks rallied last night before Parliament in Athens, urging lawmakers to reject the new demands.

To close the deal with his partners in the euro currency, Tsipras had to consent to a raft of austerity measures, including sales tax hikes and pension and labour reforms - measures he had campaigned vociferously against over the last five years of Greece's financial crisis.

Three-year deal

The result of marathon negotiations emerged yesterday: about €85 billion (US$95.1 billion) in loans and financial support for Greece over three years that will preserve its membership in the euro, shore up its banks, and allow a modicum of stability to return to the battered Greek economy.

Creditors have also dangled the carrot of a possible future debt restructuring in the event of a smooth bailout.

"We managed to avoid the most extreme measures," Tsipras said.