The agreement to negotiate a bailout won’t be enough to keep the euro region together unless Greece’s creditors also lower the country’s debt burden to boost its growth prospects, Lagarde said in a radio interview broadcast Friday. “Afterwards, however, I believe disagreements inside the Syriza party will be inevitable”.
But parliament’s endorsement won rare praise from European creditors and gave them a reason to lift – at least for now – the threat of economic oblivion that has hung over Greece for nearly a month.
This story corrects the date in the first reference to the bank closures to June 29, instead of July 29.
As a result, expectations have risen that Greece will secure a three-year financial bailout which will allow it to get back towards some sort of economic normality following weeks of crisis which have seen banks shuttered and withdrawals at ATMs limited to €60 a day.
“Now I think that things will turn out for the best, as long as those in power can act with good intentions, without corruption”, said pensioner Giannis Filinis as he waited in a queue outside a bank to withdraw the maximum 120 euros for retirees without bank cards.
A pedestrian look at newspaper front pages hanging outside a magazine kiosk in central Athens on Thursday.
But restrictions on transfers overseas and other capital controls remain in place.
Hours after parliament approved the tough new cuts, the government promised to reopen banks on Monday and gradually restore services – helped by higher cash support from the European Central Bank.
Details on the outcome will be announced early afternoon in Brussels, he said. That process could take several weeks.
The International Monetary Fund took the unusual step of publishing its “debt sustainability analysis” for Greece after parts of it were leaked to the media. It is unclear how it can sustain the burden of one of the most far-reaching austerity programmes ever imposed on a euro zone country.
Greece’s new cabinet members have been sworn in following a reshuffle that was carried out to replace anti-austerity ministers.
In a tweet, Mr Dombrovskis said the money should reach Greece by Monday.
Not everyone was so bullish.
Britain accepted the deal after receiving what its finance minister, George Osborne, said was a legally binding deal to protect any British money used in the loan.
Next week the Greek parliament will vote on a second bill needed for finalizing the agreement with the creditors.
The 40 year-old prime minister told aides the rebels had created an “open trauma” in the party but that he was committed to sticking to the deal, a government official said.
In a letter she wrote to Tsipras that was released by the Finance Ministry on July 15, Valavani said she thought the tactics of the “dominant circles in Germany” was “the full humiliation of the government and the country”.
The Greek government will be hoping that this week’s developments will soon start to relieve pressure on the Greek economy.
European equities also traded sharply higher after Prime Minister Alexis Tsipras’ reform plan was pushed through.
The vote sparked a revolt by some members of Tsipras’ own party, as well as protests on the street by Greek citizens who say the nation is already overburdened by cost-cutting measures.