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The Latest: Expert: New Greek deal has wide repercussions for euro; members can be tossed out

07/13/2015 03:09 EDT | Updated 07/12/2016 05:59 EDT
BRUSSELS - The latest from Greece's financial crisis (all times local):

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7:45 p.m.

Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, says the new deal for Greece puts more emphasis on much-needed structural reforms and less on short-term budget cutting.

"It was the best deal the Greeks could get," he says. "They did not do too badly given the terrible, terrible, disastrous starting point the current government put them in."

He says the negotiations also will have wide implications for the entire 19-nation eurozone.

"(This) was not really about Greece. It was about the very clear public announcement by the Germans and others that they were negotiating with Grexit on the table," he says. "That is breaking a taboo that marks a significant, long-term change in the way the euro works ... The signal has now been sent that if you do not behave inside the euro, you may find yourself on the outside."

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7:15 p.m.

The Greek government's junior coalition partner says it cannot back the agreement announced Monday between Greece and its European creditors — describing the proposed deal as a "coup staged by Germany and other countries."

Defence Minister Panos Kammenos, leader of the right-wing Independent Greeks party, said he had no plans to leave the government but added he would not join a national unity government.

"This deal introduced many new issues ... we cannot agree with it," Kammenos said after meeting with Prime Minister Alexis Tsipras.

The announcement is a blow to Tsipras' six-month-old government, which is struggling to maintain its majority in parliament.

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7:00 p.m.

The eurozone's top official thinks it will take around four weeks for a new bailout program for Greece to be worked out.

Jeroen Dijsselbloem, who was re-elected Monday for a second two-year term as Eurogroup President, said finance ministers are assessing how to get Athens some immediate help — or bridge financing — to meet upcoming commitments.

Speaking at the eurogroup's third meeting in as many days, Dijsselbloem said ministers had "yet to find the golden key to solve this issue."

Dijsselbloem said he hoped the agreement between Greece and its European creditors will help put the country back on a sustainable economic path.

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6:30 p.m.

U.S. Treasury Secretary Jacob Lew is welcoming the agreement between Greece and its European creditors as "an important step forward."

In a statement Monday, Lew said: "The agreement provides a basis for restoring trust among the parties and creates the conditions for a path forward for Greece within the eurozone."

Keeping Greece among the nations using the euro, Lew said, was in the best interests of Greece, Europe and the global economy.

He noted Greece's "commitment to make deep and difficult fiscal and structural reforms" and a commitment by its creditors to "create a path for Greece to return to growth" and make Greece's debt burden more manageable.

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6:20 p.m.

European anti-bailout parties have lashed out at their countries' governments over Monday's austerity agreement with Greece.

In Ireland, Sinn Fein leader Gerry Adams has described the behaviour by eurozone countries, including the Irish government, as "alarming." He says "they have closed down the Greek banking system and held the Greek government and people to ransom."

Adams says "to its shame, the Irish government took the side of the strong against those in need of support."

Spain's Podemos party levelled similar criticism. Party official Pablo Echenique tweeted that "the aim (of the deal) is to have a financial coup in Greece."

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5:55 p.m.

The new European bailout accord for Greece will face a debate and vote Wednesday in France's lower house of Parliament, where it is expected to win approval.

French law doesn't require a vote, but Prime Minister Manuel Valls said Monday it's "important" to put the deal to lawmakers to ensure broad support for the idea of helping Greece.

France's Socialist leadership has been the staunchest ally of Greece's leftist government this year. Mainstream parties on both the left and right in France have generally supported efforts to keep Greece in the shared euro currency for overall European unity.

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5:45 p.m.

The International Monetary Fund says it "stands ready to work with the Greek authorities," after a deal was reached to prevent Greece from crashing out of the common euro currency.

Under the deal reached Monday, Greece must take certain measures to reform its economy in order to start negotiations on a third multi-billion euro bailout package. One condition was for Athens to request continued IMF involvement in its finances.

The IMF was part of Greece's two previous bailouts, but at the moment Greece cannot receive any further funds from it after missing a roughly 1.5 billion-euro debt repayment last month. Greece is the first developed nation to have missed an IMF repayment.

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5:30 p.m.

Greek Prime Minister Alexis Tsipras went straight to his Athens office upon returning from the marathon eurozone summit in Brussels and into a meeting with Finance Minister Euclid Tsakalotos and other senior party officials.

Tsipras must push several unpalatable measures through Parliament in the next two days, including sales tax increases and pension reforms, to guarantee that talks on a third multibillion-euro (dollar) bailout for Greece can start in earnest.

He faces an uphill battle to persuade members of his own Syriza party, as well as his governing coalition partner, to back the deal after months of insisting he would not accept more austerity measures.

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4:45 p.m.

Greece's labour minister says the country is likely to see another general election this year.

Panos Skourletis, a former spokesman for the ruling Syriza party, told state television the governmentwill need "borrowed votes from the opposition" to pass the new austerity measures demanded by creditors.

He says "I cannot see how we can avoid elections in 2015 ... It's unnatural: We believe in something different than what we've been forced to sign with a gun pointed to our head."

Pro-European Greek opposition parties have promised to back the bailout deal negotiated by Prime Minister Alexis Tsipras as the only alternative to being expelled from the shared euro currency.

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4:25 p.m.

Pope Francis says past Greek governments bear responsibility for accumulating the country's huge debt but asks if companies can get bankruptcy protection, why not countries?

When asked by reporters about Greece's financial situation before a deal was announced Monday, Francis said "certainly it would be too simple to say that the fault is only on one side."

Francis noted proposals at the United Nations to essentially let countries seek bankruptcy protection just like corporations. He asked "if a company can declare bankruptcy, why can't a country do so and we go to the aid of others?"

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4:10 p.m.

NATO Secretary General Jens Stoltenberg says EU's tentative bailout agreement with Greece also boosts European security.

Stoltenberg says "it is good for Greece, the EU and Europe, for NATO and for all of us." He spoke during a visit to Slovenia, a eurozone member that took part in the negotiations. The NATO chief says"it's not only about stability and prosperity. It's about security, too."

Slovenian Prime Minister Miro Cerar saysGreece must now fulfil the conditions to get "a generous bailout" in return for strict reforms. He says "the key is for the Greek government to take steps to show it's worthy of trust."

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3:35 p.m.

The European Central Bank has decided against letting Greek banks draw more emergency credit — for now.

A bank spokesman said Monday that emergency liquidity assistance "was maintained at its current level" following a teleconference of the bank's governing council.

The bank's refusal to increase the level of emergency credit above the current 89 billion euros ($98.3 billion) forced Greek banks to close two weeks ago and limit withdrawals to 60 euros ($67) per day.

Analysts say the bank may permit Greek banks to borrow again once the Greek parliament votes to approve reforms that would pave the way for a third multibillion-euro bailout deal.

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2:55 p.m.

Greece's pro-European opposition parties have indicated they still back left-wing Prime Minister Alexis Tsipras, who is likely to need their help to rush a new austerity package through Parliament this week.

Conservative opposition leader Vangelis Meimarakis says "Greece can catch its breath, so that with sobriety and responsibility it can try to find its step in Europe again."

Dissent over the deal Greece made with creditors Monday is threatening Tsipras' coalition government, since it does require tax increases and pension changes. Some leftist lawmakers from his ruling Syriza party are calling the agreement the "worst deal possible ... (since it) maintains the country's status: a debt colony under a German-run European Union."

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2:35 p.m.

As negotiations over the Greek bailout dragged on, the hashtag #ThisIsACoup has been trending on Twitter — a gathering place for those complaining about Germany's and other creditors' perceived harshness toward Greece.

But German Chancellor Angela Merkel's spokesman is dismissing those hostile Twitter comments and the hashtag as "completely unfounded."

Spokesman Steffen Seibert on Monday rejected suggestions that the country had sought to humiliate Greece. He noted the agreement was reached by all 19 nations who share the common euro currency and said: "The chancellor and the whole German government are acting out of European conviction and in European responsibility."

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2:20 p.m.

Greece's small left-wing anti-capitalist Antarsya party is calling for a demonstration Monday night outside parliament in Athens against Greece's new bailout.

The party says "the hours are critical" for those who favour left-wing policies.

After months of acrimony, Greece finally clinched a bailout agreement with its European creditors on Monday that will secure the country's place in the euro and avoid financial collapse. The terms, however, will be painful for Greeks.

Before it can get 85 billion euros ($95.1 billion) in bailout cash and support for its banks to reopen, the Greek government will have to pass austerity measures that include sales tax increases and pension and labour reforms.

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1:30 p.m.

The speaker of Germany's parliament says lawmakers could vote Friday on a new bailout deal with Greece.

The German government must get a parliamentary mandate to formally open negotiations with Greece on financial aid after an agreement was reached Monday. The German government will have to return to parliament to get lawmakers to approve a final deal.

The Greek government will first have to put a set of measures through its own parliament by Wednesday, as demanded by the country's eurozone partners.

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1:15 p.m.

Germany's vice chancellor is acknowledging that Greece faces tough conditions to get a new bailout but says it would have been irresponsible to grant one without them.

Greece and its creditors agreed early Monday on a deal that will keep the country in the euro common currency. The deal still needs approval from the Greek parliament.

Sigmar Gabriel says Germany and France, the eurozone's two biggest economic powers, played a big role in making it possible for Greece to stay in the eurozone. Gabriel says a hard stance was necessary. He said "without these hard conditions, it would not have been responsible to launch such a large financial aid package."

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1 p.m.

Greeks seem to be taking the agreement their government reached with its creditors and its accompanying harsh measures in stride. Many say they understand more pain is on the way but that it is far better than leaving the shared euro currency.

Periklis Stinios, a 38-year-old lawyer in Athens, described the deal as "a historic opportunity ... for the young generation. Because the previous ones didn't manage to rise to the occasion."

Panagiotis Toutsidis, a retiree, says the Greek people got what they were expecting, which was a deal. He says it's much better than a Grexit — an exit from the euro currency.

Kostas Lambos, a retired economist, said things would be "difficult in the beginning" until people understand that "this was a necessary step for the country to emerge from the dead ends that had been created in the last few years."

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12:30 p.m.

German Foreign Minister Frank-Walter Steinmeier says the agreement with Greece shows that Europe "can act in a united fashion, in solidarity and rationally."

He says "some difficult steps" remain, particularly by Greece, which has to work on re-establishing credibility.

Still, he says the agreement reflects Europe's readiness to reach political compromises, "a characteristic that formed a peaceful and prosperous union from a fragmented continent after World War II."

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10:55 a.m.

French President Francois Hollande has hailed the agreement reached by eurozone leaders on Greece after marathon talks as a good deal for Greece and its European partners and creditors.

Hollande told reporters that, "Even if it was long, I think for Europe this was a good night, and a good day."

The French president says one of the objectives of the emergency summit was to restore hope for the Greek people. He says Greece hadn't been looking for "welfare" from other European countries, but for a program that would help its economy grow.

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10:45 a.m.

Greek Prime Minister Alexis Tsipras says the country's new bailout program should persuade markets that a Greek exit from the euro "is an issue of the past."

That, he said, would lead to investments returning to Greece and balancing out the recessionary measures that the deal includes.

Tsipras says, "The decision today keeps Greece in conditions of financial stability, it gives the possibility of recovery. At the same time though, we knew from before, that it would be an agreement whose implementation is difficult."

But he promises the burdens of the new agreement would be fairly shared and vowed to fight the "oligarchy" in his country.

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10:25 a.m.

Stock markets across Europe have spiked higher as investors breathe a sigh of relief that months of discussions have yielded a bailout agreement for Greece.

Germany's DAX was 1.2 per cent higher while the CAC-40 in France rose by 1.6 per cent. The Stoxx 50 index of top European shares was up 1.7 per cent.

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10:20 a.m.

Greek Prime Minister Alexis Tsipras says his country fought "a difficult battle" for the past six months to win a financial aid agreement that will allow his country "to stand on its feet".

He says "We found ourselves before difficult decisions, tough dilemmas. We took the responsibility of the decision in order to avert the implementation of the more extreme aims (of) the more extreme conservative circles in the European Union."

He says Greece managed to resist a request that Greece transfer public assets abroad as well as a "plan of financial suffocation and the collapse of the banking system." Tsipras stresses Greece won concessions on restructuring Greece's debt and assured medium-term financing.

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10:05 a.m.

German Chancellor Angela Merkel says a preliminary bailout deal for Greece is predicated on the country asking for further help from the International Monetary Fund.

Greece has a bailout program with the IMF that will expire in the spring of next year.

Merkel says Greece's European creditors have agreed to a Greek bailout in which "Greece will ask, after the current IMF program expires in spring 2016, for further participation of the IMF."

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9:50 a.m.

German Chancellor Angela Merkel says the eurozone is open to the idea of giving Greece some debt relief but she has ruled out an outright cut in the country's debt level.

Speaking after an agreement to start bailout negotiations with Greece, Merkel said the eurozone "is prepared, if it becomes necessary, to take additional measures" to ease Greece's debt burden.

She noted that the eurozone could give Greece "a longer grace period." A direct cut though is not an option, she added.

Merkel insisted that no relief will come until after "the first successful assessment of the new Greek program."

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9:20 a.m.

European Union President Donald Tusk says the agreement with creditors struck Monday morning will allow Greece to "get back on track."

Officials including European Commission chief Jean-Claude Juncker say the deal means that Greece will not have to leave the euro currency.

French President Francois Hollande says the Greek parliament should convene within hours to adopt new reforms, and has praised the fact that the deal should keep Greece in the euro.

For the eurozone to have lost Greece would have been to lose "the heart of our civilization," Hollande said.

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9 a.m.

Summit chair Donald Tusk says eurozone leaders have unanimously agreed on a bailout deal for Greece. In a tweet Monday, Tusk said the European bailout program for Greece includes "serious reforms" and "financial support."

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8:35 a.m.

The European Union's top economy official says he's hopeful for a deal to keep Greece in the euro — and that the German and French leaders will be at the centre of it.

Pierre Moscovici played down ideological differences among Greece's European creditors on Monday, telling France's RTL radio that the marathon overnight negotiations show there is a "shared willingness to ensure that Greece remains in the euro."

Earlier, German Chancellor Angela Merkel had been demanding tough conditions before releasing aid while French President Francois Hollande was prioritizing unity among the nations that use the euro.

Moscovici said Merkel and Hollande have "solid and direct" relations despite ideological differences and that "there is no solution for Europe" without agreement between the eurozone's two leading powers.

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8 a.m.

Greece and its creditors may be working past their self-imposed deadline, but currency traders don't seem too alarmed about the uncertainty in the eurozone.

The euro was up 0.2 per cent Monday at $1.1140.

Craig Erlam, senior market analyst at OANDA in London, said investors appear fairly optimistic that the two sides will soon strike a deal, at least in principle.

He says that with Greek banks on the verge of collapse, "the country really has run out of time."

Greece's banks have been closed for two weeks and cash-machine withdrawals have been limited to 60 euros a day. Many believe they will run out of cash this week.

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7:35 a.m.

Talks aimed at securing Greece's future in the euro have dragged into Monday with few signs that a meeting of the 19 leaders of the eurozone is coming to an end.

More than 15 hours after they started their discussions, Greek Prime Minister Alexis Tsipras appears to be holding out against two demands from his creditors: one related to the involvement of the International Monetary Fund in any bailout agreement, and the other a proposal that Greece set aside 50 billion euros ($56 billion) worth of state-owned assets in a fund for eventual privatization.

Summit chair Donald Tusk has presented a "compromise proposal," details of which remained sketchy Monday morning.

Any deal would see Greece accepting more austerity in exchange for a bailout to prevent its economy from collapsing.