Down to the wire, Alexis Tsipras finally blinked.
Enough other euro countries told Greece ‘time’s up’, and now he has said ‘yes’ to a tougher deal than Greeks rejected in the we’re-not-going-to-take-it referendum that he called.
They will take it if they want 86 billion euros from the European Stability Mechanism and the IMF.
At least, they will if Tsipras can get the laws that are supposed to make the programme enforceable passed in the Greek parliament.
The plan has to win endorsement in the other national parliaments as well.
Tsipras finally accepted a compromise on essentially German demands for a trust fund in which to keep the proceeds from privatised Greek state assets. Chancellor Angela Merkel made a concession: it doesn’t have to be in Luxembourg.
Merkel accepted the Greek authorities managing this under the supervision of the European Institutions. The target is to get 50 billion euros in here, pump half of that into the starving banks again, and split the rest 50-50 to pay down debt and invest in the economy.
On top of that, the European Commission proposes working hand in hand with the Greek government to help relaunch growth and create jobs. The executive body’s president Jean-Claude Juncker floated the figure of 35 billion euros of EU money for this.
Before beginning negotiations on how, when and what, the Athens parliament must approve guarantees, several no later than this Wednesday: automatic cuts in spending corresponding with any deviation from budget targets; sales tax simplification and increases, to bring in revenue; and pension reform. These measures spell ‘austerity’.
The sustainable programme document issuing from the late night take-it-or-leave-it summit also demands a binding calendar for opening up economic sectors to competition, along OECD guidelines, including labour market flexibility and privatising the electricity grid.