The Greek prime minister will today (14 July) seek support within his government after accepting an intrusive privatisation programme from the EU in exchange for a new €86bn (£61bn) three-year bailout.
However, Alexis Tsipras is likely to rely on opposition support to pass the economic reform measures in time for Wednesday’s (15 July) debt deadline, with his Syriza party’s extremist Left Platform calling the deal a “humiliation of Greece”, according to reports in FTAdviser parent paper the Financial Times.
The deal appears to impose even more stringent measures than the bailout offered prior to Mr Tsipras’s leaving talks and calling a referendum two weeks ago.
Greece must implement economic proposals, including an overhaul of the value added tax system and pension reforms by Wednesday in order to start formal negotiations on a financing package to stave off bankruptcy.
The leader of rightwing coalition partner Independent Greeks also said they could not agree to the accord, calling it a “coup by Germany” and its eurozone allies the Netherlands and Finland.
The deal was only reached after a 17-hour summit of eurozone leaders, with Mr Tsipras negotiating with German chancellor Angela Merkel until around 6am on Monday morning, when a breakthrough was made via terms suggested by a diplomat from one Germany-allied country.
This was described as akin to turning Greece into an economic protectorate, with plans to place the country’s most valuable publicly owned assets into a €50bn (£35.5bn) privatisation fund supervised by EU authorities.
Mr Tsipras accepted plans for this economic supervision by the bailout monitors, which include the International Monetary Fund.
Yesterday, the IMF’s director of communications Gerry Rice stated that a principal repayment of about €456m (£324m) due by Greece was not received.
“We have informed our executive board of this development. Greece’s arrears to the IMF total about €2bn (£1.4bn) to date.
“The request by the Greek authorities for an extension of the repayment obligation due on 30 June is expected to be discussed by the executive board in the coming weeks.”
peter.walker@ft.com
