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Home » Asian Life » Asian News

Greece Secures New Bailout Deal From Creditors

All-night negotiations in Brussels have resulted in the foundations of a new bailout deal for Greece being agreed though tough negotiations still lie ahead to end its financial crisis.

16 hours of talks between the leaders of eurozone nations broke up with summit chair, EU president Donald Tusk, tweeting that there had been unanimous agreement on a programme that included "serious reforms" and "financial support."

At a news conference, he described it as an "agreekment" but there was clearly a lack of trust on the creditor side, with German chancellor Angela Merkel among those saying it had to be "rebuilt" following months of tortuous talks.

She said future funding was conditional on the continued involvement of the International Monetary Fund - a scenario Greece had tried to block.

Crucially, the package will not result in an immediate cash injection for the country's cash-starved banks, which remain closed but it was understood that the European Central Bank would decide later on Monday whether to expand its emergency loan limit.

The plan includes the creation of a €50bn asset fund by Greece, based in Athens, which would be partly used to recapitalise the banks.

It demands greater austerity though the Greek prime minister Alexis Tsipras insisted he had managed to avert "the plan of a financial collapse and banking system collapse."

He said the terms included debt restructuring and a medium-term debt package of €35bn euros.

However, the deal in Brussels still faces a number of hurdles if it is to be enacted and allow for a third potential bailout for Greece.

They include a Greek parliamentary vote to ratify the basis of the package either tomorrow or on Wednesday.

Support for the deal would then allow other national parliaments to carry out their own votes and for bailout talks to progress.

However, the tough conditions imposed by the international lenders still have the potential to bring down the deal and the Greek government.

Even before the terms were known, Mr Tsipras' labour minister denounced the terms on state television.

The asset fund will be made up of publicly-owned firms to be sold off - a privatisation programme fiercely opposed by members of the governing Syriza party.

Mr Tsipras said additional burdens placed on the Greek public would be distributed "based on social justice" with the country's elite facing the lion's share of the bill.

He said: "We took the responsibility of the decision to be able to avert the harshest outcome.

"We managed to avert the demand to transfer Greek assets abroad, to avert the collapse of the banking system."

Financial markets reacted positively to the deal, with Germany's DAX 1.2% higher in early deals while the CAC-40 in France rose 1.6% as investors saw it as a positive sign that a Greek exit from the eurozone had been averted.

However, the euro remained sluggish against a strong dollar.

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