Le Monde | • Updated | By
It took a drama in three acts, three Eurogroups to deliver a compromise between Greece and the Eurozone, and to avoid the scenario of worse, that of a “Grexit”, the output of the countries of the monetary union. Athens finally got a four-month extension of the program of financial assistance it receives since 2012, which expired on 28 February. But at the cost of significant concessions for the new government Tsipras, who had promised the Greeks “the end of austerity.”
“This event was an important moment in the process of negotiating with Athens, to regain confidence. The outcome is really positive “, welcomed Jeroen Dijsselbloem, the President of the Eurogroup, who has worked behind the scenes to avoid a” clash “between the Greeks and the Germans, while the relationship between the finance ministers of the two countries – Yanis Varoufakis, Athens, and Wolfgang Schäuble, Berlin. – had deteriorated significantly in recent days
“Building trust is that we tried to do the last three weeks. One begins to get there, “, added the European Commissioner for Economic Affairs, Pierre Moscovici. “It was arduous but constructive” , for his part, noted Christine Lagarde, Managing Director of the International Monetary Fund (IMF), also present in Brussels.
After a meeting that promised endless and which was ultimately lasted two hours Friday, February 20, Europeans have therefore announced that they have agreed on a “procedure” renegotiation the assistance program (EUR 130 billion in all). The Eurogroup has held that the request from Athens to extend this plan beyond the end of February.
Athens is committed to completing the work of the previous government, the Conservative Antonis Samaras, by implementing the reforms imposed by the troika of creditors – the IMF, European Central Bank (ECB) and European Commission in Brussels – not all on track. In exchange, the country will reach about 7 billion outstanding of the total appropriations. Athens still has “flexibilities”. The head of the Greek government, Alexis Tsipras, may amend the list of reforms to do, provided they preserve the balance of public finances
For the extension of four months is validated, the Greeks will have to submit their list of reforms by Monday, February 23 for approval by “fire” the “troika” (Athens got that we no longer use that term, reviled Greece, and is replaced by “institutions”).
“ S i everyone continues to be reasonable,” said a close to the negotiations, this list will be politically confirmed on February 24, during a Eurogroup phone. It will enable relevant Ministers to be sufficiently armed to present the request for extension of the Greek aid plan to their respective parliaments, which must give the green light before February 28. In this case are the Dutch, Finns, Estonians and Germans. They have campaigned for details as possible to present to the Bundestag.
Then a period open until June, during which the Greeks list of reforms will be refined, encrypted, and then negotiated in detail, with the rest of the Eurogroup. Its application will be properly verified on-site by “institutions”. They operate control missions, such as the “troika” before. These controls were also a strong requirement of the Minister Schäuble.
During those four months, Europeans should reach agreement with the Greeks on the “after” second aid plan. Greece, which has to repay a huge debt of 320 billion euros – or 175% of its gross domestic product (GDP) – not perhaps have the means when the plan is finished, to fund only on markets without new “umbrella” European financial. In a word, without a third plane help …
“The hardest step was taken. Although in the coming months, it will negotiate inch by inch, “ fell several European sources on Friday night, aware that the” new deal “between Europeans and Tsipras government was still far from certain . The compromise Friday by drawing a “negotiation path” for the coming months, allows in any case to reassure investors and prevent financial markets revved up.
Because we are passed near the psychodrama past two weeks. We even approached the accident between Germans and Greeks in recent hours. After the Minister Schäuble said he was insufficient first application, yet very formal, extension of the aid plan, from Athens to Brussels Thursday, February 19th. This gesture was a major concession on the part of the Greeks, who would have preferred that they be given a bridge loan without reform commitment.
If the reason has prevailed Friday “It’s because everything is played in the preparatory meetings for the Eurogroup, without confrontation between Mr. Schäuble and Varoufakis” says a European source. Thursday night already, Mr. Tsipras had spent time on the phone with German Chancellor Angela Merkel. She talked about the Greek case his lunch with Francois Hollande in Paris the next day, the latter stressing the need for a stable framework for negotiations with Athens. The “deal” was finalized a few hours later with a mediation process, just before the Eurogroup, between Mr. Moscovici, M me Lagarde and Mr. Dijsselbloem. “ This has negotiated directly on the phone with Prime Minister Tsipras” provides close to the talks.
Reopen liquidity tap
“Greece leaves behind the memorandum and becomes co-author of the reforms and destiny” , welcomed Mr Varoufakis Friday . True, it gains the right we no longer use the terms “troika” and “memorandum of understanding” (the “rescue plan”), against which Mr Tsipras has spent his entire campaign. The ECB could open the tap closed cash brutally early February (the institution no longer accepting to take the Greek government bonds or Greek bank bonds guaranteed by the government, as the country’s banks offer it as collateral.)
But the Greeks will have to fight with the “institutions” to implement their proposals “anti-austerity” … “Mr. Varoufakis and Mr. Tsipras would have had to sign the first compromise text that was put on the table on 11 February. He was more vague, more advantageous for them, “ provides a European source. “But at that time, it was perhaps not possible, politically, assign as fast face in Brussels,” analysis from another source.
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