Greek bailout: Alexis Tsipras heralds euro debt reprieve but says real difficulties are still ahead

Greece faces a deadline on Monday to submit a list of reforms to lenders

Chris Stevenson
Sunday 22 February 2015 01:00
Alexis Tsipras last week as he battled with the Greek debt crisis
Alexis Tsipras last week as he battled with the Greek debt crisis

Greece’s Prime Minister Alexis Tsipras declared yesterday that his country had won an important battle after it gained a reprieve from its creditors – but said that the “real difficulties” are ahead.

Under the deal agreed on Friday, Greece faces a deadline on Monday to submit a list of reforms to lenders – which has to be approved before members of the eurozone can approve the four-month bailout extension, and stave off bankruptcy, for the time being at least – with current deals set to lapse at the end of the month.

“We won a battle, not the war,” Mr Tsipras said in his first public response after the sealing of the agreement at an emergency meeting of eurozone finance ministers in Brussels on Friday night. But speaking on Greek television, he said: “The difficulties, the real difficulties ... are ahead of us.”

The Prime Minister is under pressure to present the deal as a win for his government. His Syriza party won the elections last month – subsequently forming a left-dominated coalition – with the promise to reverse budget cuts and negotiate hard with the county’s creditors.

There is a feeling that the deal has marked something of a climbdown for Mr Tsipras and Syriza, with Greece having to make a number of concessions, and he could face a backlash from members of his own party. However, the Prime Minister was keen to put a positive spin on the deal, calling it “a decisive step towards leaving austerity, the bailouts and the troika behind”. “The troika” is the name given to Greece’s international creditors, including the European Commission, the European Central Bank and the IMF, although the new agreement merely refers to the group as “the three institutions”.

Germany and Greece succeeded in agreeing on a breakthrough of a four-month bailout extension (Getty)

The reference to austerity was to the fact that, on Greece’s required target for its primary budget surplus, the new deal agrees to “take into account” the economic conditions in 2015. This opens the possibility of lowering the target, freeing funds to ease what Mr Tsipras calls the nation’s “humanitarian crisis”.

Greek officials also shone a positive light on the fact that the country gets to set its own points of reform in the list it must submit tomorrow. If this list is not accepted, however, it leaves the deal potentially in tatters and a possible euro exit would once again rear its head.

Mr Tsipras and the Finance Minister, Yanis Varoufakis, were meeting with Greece’s inner cabinet last night to brief it on the Eurogroup meeting and discuss the proposals. Mr Tsipras didn’t specify what reforms would be considered, but mentioned a crackdown on corruption and reforming the state sector.

Greek was seemingly pushed towards a deal by the potential for a bank run on Tuesday when banks reopen after a three-day holiday. About €1bn (£739m) was believed to have flooded out of Greek bank accounts on Friday, due to fears that the talks would fail and Athens might have to reintroduce its own currency.

However the deal came about, there was relief in Greece yesterday. “We won time,” government spokesman Gabriel Sakellaridis said of the deal yesterday. “The Greek economy and the Greek government weren’t strangled, as was perhaps the original political plan by centres abroad and within the country.”

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments