(Corrects that Juncker said loan is from European Union, not eurozone members). Greece has a tentative rescue deal, but relief that it is not falling out of the euro is…
Jean-Claude Juncker says the deal will be successful “under the assumption that the whole program will be implemented”.
First, the government committee now approving – or more accurately not approving – requests by businesses for the banks to finance imports would have its powers transferred back to the banks.
German Finance Minister Wolfgang Schaeuble has mentioned a possible temporary exit from the euro for Greece to sort out its problems. How to get Athens the money is proving hard.
Those updates included the vote by Greece’s parliament shortly before midnight to accept new austerity measures demanded by creditors as the prerequisite for receiving almost $100 billion in the country’s third bailout in five years. Greece also has to adopt a second set of measures on July 22.
The vote paved the way for eurozone finance ministers to open detailed talks on the bailout and on Thursday they said they agreed “in principle” to start negotiations.
He promised more action if needed. Greece’s Parliament has approved an austerity bill demanded by bailout creditors, despite a significant le…
“But the results of today’s vote constitute a serious division in the unity of Syriza parliamentary group”, he said.
Junior Dutch coalition partner the Labor Party welcomed the agreement as a key show of solidarity in a Europe beset by crises at its borders.
Those fateful words from European Central Bank President Mario Draghi helped to stabilise the situation for a while, but now that those funds are due to be repaid, the problems that plagued Greece three years ago are once again coming home to roost.
According to Draghi, the European Central Bank has acted within its mandate and it is not up to the European Central Bank whether Greece should be a member of the euro area.
However, Paul De Grauwe, an expert on the eurozone at the London School of Economics, warned that by strictly limiting the funding available to the banks, the ECB risked exacerbating the run on deposits.
A pedestrian passes in front of the Bank of Greece in Athens. “We had a series of news with the approval of the bridge-financing package, with the various votes in various parliaments, to begin with in the Greek parliament, which have now restored the conditions for a raise in Emergency Liquidity Assistance”.
The cash will allow Greece to meet the repayment on a 3.5 billion-euro bond held by the ECB that matures on Monday, and defuse the ticking time bomb of a default that would have required the ECB to cut off its bank aid, bringing on a financial collapse.
Mr Dijsselbloem said the reforms passed by Greece were “a start to rebuild trust” as he called for urgent foreign investment to help boost the debt-ridden economy.
At the same time as the Greek crisis hit its peak, the Western powers and Iran negotiations to ease sanctions and limit nuclear production kept worldwide attention.
The ECB’s decision to make no changes in monetary policy this week was in line with the expectations of analysts, given the principal focus of the European Central Bank this week on the question of how to deal with the Greek government and banking system’s interlinked liquidity and solvency issues. Germany’s DAX and France’s CAC-40 were up by the same rate. The figures were calculated from a survey of 142 banks in the eurozone that was conducted between June 9 and June 24, a period when tensions between Greece and its creditors was escalating but before they reached a boiling point after Athens called for a referendum on the bailout that was held on July 5.