The decisions of the EU Summit on the Greek problem let the country time to breath and the Prime Minister George Minister smiled after a long time.
It is estimated that the agreement reached gives Greece the time needed, and the low profile of the government helped to achieve two objectives: first, to present the outcome of the Summit as a Greek success. Second, to show that this development was the outcome of tough negotiations between the Prime Minister and the European leaders, as he remained stable in the Greek positions, according to government sources.
It was considered positive that the European Commission and the ECB avoided using the term “selective default”, which allows the government seek for political consensus domestically.
Moreover, the “European Marshall Plan” is considered also a positive point, while the Greek banking system is shielded.
What is said to be Papandreou’s “political victory” is that the Greek problem became a European problem.
However, the package still has dark spots regarding the government’s next steps. Neither the Prime Minister nor the Finance Minister clarified whether the agreement requires further austerity measures, while the guarantees required by the country remain unknown.
The euro zone countries and the International Monetary Fund will give Greece a second bailout worth 109 billion euros ($A145 billion), on top of the 110 billion euros ($A146 billion) already granted a year ago.
Banks and other private investors will contribute some 37 billion euros ($A50 billion) to the rescue package by either rolling over Greek debt, swapping it for new bonds with lower interest rates or selling the bonds back to Greece at a low price.
A breakthrough became possible after the eurozone’s two power brokers, German Chancellor Angela Merkel and French President Nicolas Sarkozy, reached a compromise just hours before the summit.
as private banks have offered a plan to exchange and roll over Greek debt that will save the country 54 billion euros ($77.6 billion) over three years, the Institute of International Finance said Thursday
(source: AFP, capital, AP)
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