Greece and eurozone settle their differences _ for now

[Lite Beer]

Greece and eurozone settle their differences _ for now
LORNE COOK, Associated Press
PAN PYLAS, Associated Press

BRUSSELS (AP) — Following weeks of recrimination and distrust, Greece and its creditors in the 19-nation eurozone reached an agreement Friday on extending the country's rescue loans, a move that should dramatically ease concerns it was heading for the euro exit as soon as next month.

The agreement, which looked a long way off Thursday when one German official compared Athens' request for more time to the infamous Trojan Horse, will mean that Greece will avoid going bankrupt, at least over the four months of the extension. It should also mean that capital controls won't be needed and that Greek banks will have enough money to stock up their ATMs.

To get the money though, the Greek government has one more hurdle to clear. On Monday, it has to present a series of unspecified economic reforms measures that are deemed acceptable by creditors and rooted in Greece's previously enacted bailout agreement — something the government had promised not to do.

Still, the Greek government will be the author of the reforms pursued and that represents a change from the past five years when Greece has relied on rescue money to avoid going bankrupt and was effectively ordered to enact a series of austerity measures.

"We have established common ground again," said Jeroen Dijsselbloem, the eurozone's top official, after the meeting in Brussels.

And Greek Finance Minister Yanis Varoufakis said the deal allows both Greece and Europe "to turn a page ... As of today, we are beginning to be co-authors of our destiny."

Varoufakis conceded that the Greek government would be "in trouble" if the reform measures, which are likely to include a series of measures to tackle corruption and tax evasion aren't backed by representatives from the European Central Bank, International Monetary Fund and European Commission — previously known as the troika.

However, he insisted they "won't be shot down by the institutions."

If the list of reforms is sanctioned, then it will be further detailed and agreed upon by the end of April.

Friday's agreement was clinched just a week before Greece's 240 billion-euro ($270 billion) bailout program expires and is aimed at buying time for both sides to agree on a longer-term deal to ease the burden of the bailout loans.

The Greek government isn't getting the time it requested Thursday. Instead of the six-month bailout extension it asked for, it's getting four — with Greece having to make big debt repayments after the new cut-off point, that's a sign that its creditors aren't willing to give Athens free rein.

Still, following weeks of tense negotiations in the wake of the election of the new left-wing Greek government, the final deal showed an element of compromise by both camps and investors appeared to breathe a sigh of relief with the Dow Jones index closed at a record high Friday as news of the Greek deal broke.

"This deal temporarily eases tensions and gives Greece breathing room to negotiate long term-debt relief," said Jay Jacobs, research analyst at Global X Funds. However, he warned that it could just set up another "potential future standoff four months from now if parties involved continue brinksmanship negotiating tactics."

Brinkmanship was just one of the games that was referenced over the past few weeks of discussion. More often than not, it was German Finance Minister Wolfgang Schaeuble, who was the bulwark against the Greek government's ambitions.

But he emerged from Friday's meeting in conciliatory mood. "This is an important step forward," he said.

Schaeuble will no doubt be making sure that the promises Athens has made for the coming months will be kept.

"We are now in the process of confidence building," he said. "That's why there are strict conditions."

As well as presenting a list of reforms by Monday, the Greek government has committed to honoring its financial obligations to all creditors "fully and timely."

In addition, it has committed to make sure that it continues to post primary fiscal surpluses — what's left in the budget after debt-related payments. However, it looks like the government has managed to convince creditors to reduce the amount of that surplus in response to the worsening economic outlook for Greece this year. In the statement outlining the broad thrust of the agreement, the eurogroup said "the economic circumstances in 2015" will be taken "into account."

Varoufakis claimed that as a victory as it will could free up some cash to help pay for public services. Pensions, he insisted, would not be cut as previously planned.

Greece also made the concession to not take any measures that might negatively impact budget targets, economic recovery or financial stability. Previously, it had sought to loosen its budget somewhat.

Dijsselbloem said Friday's agreement was a "first step in this process of rebuilding trust" between Greece and its euro partners and allows for a strategy to get the country "back on track."

"Trust leaves on horseback and returns on foot," he said.

Varoufakis claimed the deal was a win for his country because his government will be able to decide what reforms to propose.

"The weekend will be one of joy and creativity," he said. "We are writing our own reforms."

Varoufakis said the substance of Friday's deal was to all intents and purposes the same as the government's proposal to the eurozone on Thursday.

He also said the deal has put paid to the view that ATMs would run out of cash and that he had no doubts that Greek bank shares will rebound.

"Greek depositors will be reassured," he said.

___

Raf Casert in Brussels and Geir Moulson in Berlin contributed to this report.

-- (c) Associated Press 2015-02-21

[NeverSure]

The Eurozone is just trying to kick the can down the road. The next time the can will be too big to kick.

[MAJIC]

The problem is Greece is Broke,they are not going to pay back their debts,to the EU,and have no intention of ever doing so,and will be back for yet another freebee in due course!

It's easy to spend other Nations money,and then sit back and watch the Bubble burst!

[Credo]

There's not much choice but to kick the can down the road.

[MAJIC]

The Eurozone is just trying to kick the can down the road. The next time the can will be too big to kick.

Nothing has been settled,just delaying the inevitable bankruptcy, while Greece sucks the EU.

[NeverSure]

There's not much choice but to kick the can down the road.

When do they pull the plug and take the patient off life support?

[Loptr]

The Greece problem is only the tip of the iceberg... The real threat is the $26 trillion USD in Euro currency derivatives exposure...

http://abcblogg.com/ekonomi/according-bank-international-settlements-26-45-trillion-dollars-currency-derivatives-directly-tied-value-euro/

“Anyone with half a brain should be able to see that a large number of those patterns are unfolding once again right before our eyes.

Unfortunately, most people in this world end up believing exactly what they want to believe.

No matter how much evidence you show them, they will not accept the truth until it is too late.”

[Scott]

Off-topic posts removed. The topic is about Greece and the Eurozone.

[Mosha]

So the government that was elected to end austerity, has agreed to carry on with austerity. When does campaignibg start for the next election?

[Srikcir]

Varoufakis claims, “We are no longer going to be following a script that was given to us by external agencies,” … The old program, he added, is “in abeyance.”

Nice spin but not true.

Greece must hand over its custody of nearly 11 billion euros earmarked for stabilizing its banks the bank recapitalization money back to the ECB to be kept safely under lock and key in Luxembourg. Also, the ECB will not restore Greek banks’ former bank privileges until the ECB say "it’s safe to do so."

Greece also must continue to honor all its debts and not to reverse any of the reforms undertaken to meet the conditions of previous loans – a reversal of election promises!

So what did the “communist in a Burberry scarf” really get - four more months to negotiate pending ECB acceptance of any of Greece’s alternative by next week. Then Greece can get 3.6 billion euros from ECB/IMF, with the usual conditions of course. And it will have continued access with ECB approval to the 11 billion euros for bank capitalization. Greece must continue to bend to the will of the ECB - an important message to Portugal and Italy.

The only thing in abeyance will be the communist government’s re-election. It still will not cut the generous pension nor make further monetary restrictions. The government must either sellout its constituency or drive the economy into the ground. Either case spells the end of this red government.

[shirtless]

Just let them go they are irresponsible and have no intentions of paying,

[smedly]

My interpretation of this

The Greek people voted this crowd of naïve uneducated people into government on the basis of election promises they could never keep - they simply didn't understand the consequences.

Now that it has been explained in a plain and easy to understand way what would happen if they reneged on loan payments - they have realised the outcome would be dire.

Problem now is that the Greek people have a inept government incapable of actually running the country and removed one that could - all based on election promises that were never realistic and could never have worked - how dumb is that, perhaps the previous government should have made it clear to the people the stupidity and consequences of what was being proposed.

I think we are going to see another election in Greece pretty soon

[Lissos]

The Greek Finance Ministers come across like Comical Ali with his spin, every time he opens his mouth.

https://www.youtube.com/watch?v=W9aW1atFLMM

The difference being, Comical Ali will remain forever funny while the Greek Finance Minister's antics are not funny in the slightest.

I get why he's doing it, he is compelled to do it because that's what the Greeks voted for, but they're going to burn him at the stake eventually.

I agree with posters here, that this matter of forever kicking the can down the road / delaying the inevitable is beyond irritating for other Europeans.

[MAJIC]

There's not much choice but to kick the can down the road.

When do they pull the plug and take the patient off life support?

When the patient has had one too many cash transfusions!