'Gun to Greece's Head Pulled Away' As Tentative Deal Struck in Brussels
The newly-elected Syriza government of Greece and its creditors from the 19-nation Eurozone have reportedly reached a draft deal for a loan extension to the country for another four months.
“Today’s agreement will allow the new Greek government some fiscal space to increase employment and economic growth, and undo some of the damage of years of troika-induced depression. That is the most important thing. The details of what to do about the debt can be worked out later.” —Mark Weisbrot, CEPRThe specifics of the agreement, and the conditions imposed on Greece, have not yet been fully revealed to the public, but according to Mark Weisbrot, co-director of the Center for Economic and Policy Research (CEPR)in Washington, DC, the deal represents a “significant retreat” by the so-called troika and “shows that their austerity program, which has failed miserably, is no longer politically enforceable.”
According to CEPR’s preliminary analysis, the agreement gives Greece fiscal flexibility, lowering previous fiscal surplus constraints and forestalls the immediate threat of Greece being forced out of the eurozone through a loss of support from the European Central Bank (ECB). Media reports citing Greek officials familiar with the deal indicated that additional tax increases and cuts to pensions were not part of the agreement.
“European officials had a gun to the head of the Greek government, and they just pulled it away – at least for now,” Weisbrot said.
The agreement, he continued, “will allow the new Greek government some fiscal space to increase employment and economic growth, and undo some of the damage of years of troika-induced depression. That is the most important thing. The details of what to do about the debt can be worked out later.”
The Guardian is offering live coverage of updates and commentary.
Following the announcement of the tentative agreement, ministers from the Eurogroup made limited statements to the press on Friday.
“This is not a moment for jubilation,” said Greek Finance Minister Yanis Varoufakis in a press conference. “This agreement is a small step in the right direction.”
SCROLL TO CONTINUE WITH CONTENT