European Union has agreed to extend a third bailout package to Greece after night long negotiations. The terms of the bailout is not immediately known. But indications are that Athens has to introduce more stringent measures to avail an immediate funding of nearly 35 billion Euros.
Media reports shows that Greece has to place its government owned assets in a separate trust to meet the emergency debt payment in future. This was a demand that met resistance from Greece in previous negotiations. Germany, the super power of the currency union has demanded the measure to ensure that Greek bailout will not result in economic injury to the Euro zone.
Both sides- the creditor and debtor have expressed satisfaction about the new consensus which will keep Greece in the currency union for the time being.
Prime Minister Alexis Tsipras has said that Greece has secured a growth package from Euro Zone after a tough battle.
The terms of the agreement includes creation of a trust fund by his government to place the government assets valued around 50 billion Euros in a trust fund for the direct payment of the debt.
Out of the €50bn, €25bn would be used to recapitalise Greek banks.
The European Monetary Union has a relief that the possibility of a Greek exit from Euro zone is averted, at least in the medium term.
“There will not be a ‘Grexit’,” said the head of the European Commission, Jean-Claude Juncker. The Commission is an important creditor under the new package.
A happy outcome for the Greek public is that the agreement will end the painful bank stress. Athens was continuing a stringent control over the bank transactions in the context of the financial emergency over the last two weeks.
“We averted the plan for a financial strangulation and for the collapse of the banking system”- the PM has relieved in front of the media.