The Eurogroup on Friday ended avoiding Grexit while allowing the new Greek government to formulate a specific plan to send to the IMF ECB and European Union for approval.
Essentially: Greece bargained for more time, while making some commitments to their debtors, as well as asking for some compromise on austerity.
The current Master Financial Assistance Facility Agreement (MFFA) is extended four months during which Greece will propose and implement structural reforms to better the fiscal situation of the country.
By the end of business on Monday, Feb. 23 Greece must submit a list of reforms to the institutions for review:
“The institutions will provide a first view whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review. This list will be further specified and then agreed with the institutions by the end of April. ” – Eurogroup Statement
The agreement also outlines that Greece cannot further unilateral legislation that would affect the fiscal goals in place by the current MFFA.
PM Alexis Tsipras and FM Yanis Varoufakis ability to uphold SYRIZA’s main election point to ease austerity measures while pleasing their debtors will be tested following the Monday list .
Greece’s initial proposal was a 6-month extension but compromised on 4 months. This means the terms of the MFFA will have to be renegotiated in June for the continuation of the program.
#Greece @J_Dijsselbloem, meeting was meaningful in building trust with#Greek Officials, tonight first step
— Niki Papadogiannakis (@nikipapadog)
February 20, 2015
Meanwhile, pundits have speculated about the impact of this decision, what the list will include and if the relationship between Greece and its debtors is mending as Eurogroup President and Dutch FM Jeroen Dijsselbloem noted in the Eurogroup press conference (above.)
- Ten days that shook the euro; how Greece came to the brink(Reuters)
- Greece readies reform promises after Eurogroup climbdown (Reuters)
- Greece Did OK (Paul Krugman/ The New York Times)
- How Greece Escaped a Major Crisis– for Now (The Atlantic)
- Greece must search for redemption on its own (Irish Examiner)
- Five Things on Greece’s New Agreement With Its Eurozone Partners (Wall Street Journal)
- Greece bailout deal: Backtracking on promises? (Al Jazeera)