A new day begins for all Greeks, says PM after euro zone approves debt deal

Wed, Nov 28, 2012, 00:00

There were few Greeks awake at 3am yesterday to hear their prime minister tell them that the Eurogroup’s agreement to pay out a long-awaited bailout instalment was the result of a fight by the entire country.

“Tomorrow a new day begins for all Greeks,” Antonis Samaras told reporters at 3am, shortly after euro zone politicians agreed to release a massive €43.7 billion tranche in bailout loans, in four instalments starting from the middle of next month.

The deal, Greece’s finance minister, Yannis Stournaras, said from Brussels, would keep Greece in the euro, contribute to debt reduction and offer it “a significant opportunity to exit the vicious cycle of recession and over-indebtedness”.

Echoing those positive assessments were Mr Samaras’s coalition partners. The deal was a “the new starting point the country needed after nine months of waiting”, said Pasok leader Evangelos Venizelos, while Democratic Left chief Fotis Kouvelis described it as a “decisive step towards Greece remaining in the euro”.

‘Half-baked compromise’

However, leftist Syriza, the main opposition party, said the outcome of the Eurogroup meeting represented a stop-gap deal between German chancellor Angela Merkel and the International Monetary Fund’s director Christine Lagarde.

“It’s a half-baked compromise, a band aid on the gaping wound of debt,” said Dimitris Papadimoulis, a leading MP with the party.

Under the deal, the lenders will pay out €34.4 billion in December. The greatest share, €23.8 billion will go to recapitalise the country’s cash-strapped banks, while €10.6 billion will go to budgetary financing.

This includes €4.5 billion to cover this year’s primary deficit and €3.5 billion to pay off some of the €10 billion debt owed by the state to the private sector.

The remainder will be used for debt servicing. None of the money will go directly into pensions or social welfare.

The mainstream newspapers heralded the deal: mass-circulation Ta Nea carried the headline “The first smile”, adjoining a smiley face containing the European and Greek flags, while shipping business Naftemporiki said the December tranche would represent a “deep breath”. However, the deal was labelled a “poisonous tranche” by the left-wing Efimerida ton Syntakton.

Little enthusiasm

As people made their way to work, there was little enthusiasm for the news. Many Greeks seem exhausted by the speculation over when the country would get this tranche, which was originally earmarked for release in June, said George Tzogopoulos, an analyst at the Eliamep think tank.

“They gave us the money not because they love us but because they want to save themselves. The present and past governments have sold Greece out,” said taxi driver Yiorgos Politis, who says his business is down 80 per cent.