Greece and euro zone 'unanimously' reach deal

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European leaders in Brussels have reached a third bailout deal for Greece on Monday morning after more than 17 hours of talks on the thorny subject of reforms and more financial aid for the near-bankrupt country.

Politicians quickly took to social media to break the news of a breakthrough. Belgian Prime Minister Charles Michel tweeted the word “agreement” and the Cyprus government spokesman said “we seem to have deal on Greece.”

Bond yields in Italy and Spain fell to session lows after the comments and the euro revers earlier losses to hit the day’s high of $1.11725. the pan-European Stoxx 600 index opened 0.8 percent higher.

The president of the European Union, Donald Tusk, also tweeted to confirm the news

An ‘agreekment’

In a press conference Monday, Tusk said “we have an ‘agreekment'” and said both sides had agreed in principle “to start negotiations on an (European Stability Mechanism) ESM program, which, in other words, means continued financial support for Greece.”

“The decision gives Greece the chance to get back on track with the support of European partners,” he added, but said there would be “strict conditions.”

European Commission President Jean-Claude Juncker added that there would be no Greek exit from the euro zone as a result of the deal, while the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said talks would continue over the details of the bailout.

Speaking to reporters after the deal, Greek Prime Minister Alexis Tsipras said the most extreme reform plans had been averted, and the country had endured a big struggle for the last six months.

Greek Prime Minister Alexis Tsipras
Jonathan Raa | Pacific Press/LightRocket | Getty Images Greek Prime Minister Alexis Tsipras

He added that the deal’s implementation will be difficult, but allowed Greece to return to growth.

Billion-euro fund

A key part of the agreement is that a 50 billion euro ($55 billion) fund will be set up using Greek government assets.

This will be used to help pay down the country’s debts and refinance its banks. Dijsselbloem said a panel of experts would decide which assets will be used and how the funds will be monetized—either through privatization or re-investment. Some 25 billion euros of the fund are expected to be used to recapitalize Greek banks, which have been operating under capital controls for over a week.

Although the agreement helps quash fears that Greece could be heading for a euro zone exit, there is some skepticism that Tsipras can get the reform measures passed through parliament.

Reforms required of Greece include an overhaul of its pension system and widespread sales tax rises that could face opposition in the parliament, although there are reports that Tsipras could expel any rebels within his Syriza party that don’t back the measures.

Despite the apparent capitulation of Greece to lender demands, Juncker pointed out that no side had been humiliated by the deal.

“There are no winners and no losers. I don’t think the Greek people have been humiliated and the other European governments have not lost face. It is a typical European agreement,” he said.

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