Millennium Post

EU blinks... gives Greece 4-month loan extension

The 19 eurozone finance ministers reached the hard-won deal at tense talks pitting Greece against an angry Germany, suspicious that the new radical Leftist government in Athens was looking to ditch its austerity obligations.

“The meeting was intense because it was about building trust between us,” said Eurogroup head Jeroen Dijsselbloem, after the talks ended with a two-page statement setting out the tough conditions Athens will have to fulfill.

In exchange for the extension, Greece agreed it will submit a list of economic and other reforms by
Monday which its eurozone partners will then review to see if they go far enough. On Tuesday, they will report back to Greece and decide whether to proceed with the agreement, with the chance that the compromise be scrapped if officials are left unsatisfied.

Greek Finance Minister Yanis Varoufakis said the deal marked a new era for Athens and its relationship with the European Union, after two painful bailouts put together at the height of the debt crisis to save the euro. Athens claimed the rescues and the austerity measures it had to follow since its first 2010 bailout had wrecked the Greek economy, making it impossible to manage its mountain of debt.

“Today was a pivotal moment because Greece for five years now has been lonely, isolated in the Eurogroup. Today that isolation has broken,” Varoufakis said. However, he warned, “If the list of reforms is not agreed, this agreement is dead.”

Markets reacted positively to the deal, with the Dow and S&P 500 surging to fresh records on Wall Street as fears of a catastrophic exit by Greece from the euro receded. 

Two previous rounds of talks failed in bitter acrimony amid Greek accusations that Berlin and other hardline member states were sabotaging a deal.
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