Tuesday 17 October 2017

Greece crisis: Five ways Tsipras-led government backed down in bailout talks

Greek Prime Minister Alexis Tsipras speaks with German Chancellor Angela Merkel (L) and French President Francois Hollande at a euro zone leaders summit in Brussels, Belgium
Greek Prime Minister Alexis Tsipras speaks with German Chancellor Angela Merkel (L) and French President Francois Hollande at a euro zone leaders summit in Brussels, Belgium
Greece's Prime Minister Alexis Tsipras gestures as he leaves an emergency euro zone summit in Brussels
Ailish O'Hora

Ailish O'Hora

After a gruelling 48 hours in Brussels and weeks and weeks of talks before that, the basis of an agreement on a bailout deal for Greece has been decided - although we are still a long way to a final result given that a number of Governments need to ratify any plan.

Many believe that the Alexis Tsipras-led Government's role is now untenable given the conditions attached to the deal following on from the recent referendum where Greek people voted against bailout terms that were less strict than the ones just agreed.

Here are five examples of how the creditors used the upper hand and Greece bowed to pressure although it didn't really have much in the bag in terms of bargaining and was up against the big boys like Germany:

1. €50bn privatisation fund: This is a biggie. Greece has agreed to the creation of a €50bn using Greek assets which will be used mainly to recapitalise the banks and pay down debt. The trust will be put beyond government reach.

2. Debt reduction: Very little reached on the Greek side in relation to debt reduction. The overnight agreement says that haircuts on debt can't be taken but tax hikes and serious pension reforms also have been agreed.

3: The International Monetary Fund: Greece negotiators wanted a bailout agreement that did not include the involvement of the IMF but they failed on this wish.

4. Referendum: In the recent referendum, Greek people voted down bailout terms that were not as strict as the ones just agreed. The Tsipras-led Government's apparent blanking of the referendum results has angered many in Greece.

5. #thisisacoup: One EU source said that what was being agreed was tantamount to turning Greece into a "German protectorate".

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