Prime minister says his anti-austerity government now faces its toughest work, in first public reaction since deal made to extend bailout for four months
Greece’s prime minister, Alexis Tsipras, has said the country has won a significant battle but has yet to win the war, in his first public reaction to the latest deal to keep the debt-stricken nation financially afloat.
Addressing Greeks less than 12 hours after the agreement was sealed at an emergency meeting of eurozone finance ministers in Brussels, the leftist leader said the hardest work now lay before his anti-austerity government.
The accord, which now rests on Athens proposing reforms acceptable to its creditors at the EU and IMF by Monday, was the bridge that would link Greece from a hated era of international oversight embodied by hard-hitting austerity to a period of growth envisaged by the government.
“We kept Greece standing and dignified,” said Tsipras, adding that the deal had ended the unrealistic primary surpluses demanded by the previous bailout plan signed by his predecessor. “In effect it cancels austerity … In a few days we have achieved a lot but we have a long road. We have taken a decisive step to change course within the eurozone. Now negotiations enter a new, effective stage.”
But Tsipras, whose left-dominated coalition won power almost a month ago, is also likely to face a backlash from within his own Syriza party.
The bailout programme extended for four months under the agreement reached late on Friday has prevented Greece from being shown the euro exit door but has come at a heavy price.
Despite the government’s positive spin, Athens was forced to make significant concessions, including reneging on demands for a writedown of its monumental debt load.
On Saturday, there was widespread consensus in Athens that what the government had agreed to – under threat of capital controls being enforced on the country’s fragile banking system – was the best of increasingly bad deals that would inevitably be on offer.
‘We won time’
Capital flight has accelerated in recent days, with an estimated €1bn flooding out of Greek banks on Friday, according to the country’s central bank, as worried investors, fearing the loss of savings if the talks failed, withdrew funds.
“We won time,” said government spokesman Gabriel Sakellaridis early on Saturday. “The Greek economy and the Greek government weren’t strangled, as was perhaps the original political plan by centres abroad and within the country.”
Faced with the risk of a chaotic bank run on Tuesday after a long holiday weekend, finance minister Yanis Varoufakis stressed that the deal should calm savers.
“It is quite clear that the reason why we had a deposit flight was because every day, even before we were elected, Greeks were being told that if we were elected and we stayed in power for more than just a few days the ATMs will cease functioning,” he said in Brussels on Friday night.
“Today’s decision puts an end to this fear, to the scaremongering.”
German finance minister Wolfgang Schaeuble, who had fought making any further concessions for Greece, said after the deal was announced: “Being in government is a rendez-vous with reality. Quite frequently it is not as nice as the dream.”
European officials said the standoff had in some ways come down to a clash of personalities, with Schaeuble furious at the negotiating style of the casual Varoufakis.
The relationship between the two finance ministers remained difficult, one official said: “The trust just isn’t there. [This time] Varoufakis kept a very low profile.”