Wednesday

19th Jun 2019

Greece capitulates at EU summit

  • Merkel 'did not have the impression' the EU is now a 'German Europe' (Photo: The Council of the European Union)

A Greek exit from the eurozone has been avoided after a weekend of tough talks, but the political cost of arriving at a deal is likely to be felt for years to come.

After 18 hours of negotiations, culimnating six months of wider talks, euro leaders emerged bleary-eyed on Monday morning (13 July) to announce a deal that will, eventually, see Greece get a new bailout if it takes painful reforms and if it agrees to intense scrutiny at every step of the way.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • It is unclear if Tsipras will be able to get the terms of the agreement through the Greek parliament (Photo: The Council of the European Union)

The immediate result was summed up by European Commission president Jean-Claude Juncker.

"There will be no Grexit”, he said.

He noted that he’s happy with the "form and substance" of the deal, adding: "I don’t think the Greek people have been humiliated and I don't think the other European leaders lost face".

But despite his assessment, the deal represents capitulation on nearly all points for the left-wing Greek government, which was elected on a platform to stop austerity and which, just one week ago, held a referendum in which Greek people rejected creditors' demands.

With trust between Athens and creditors almost non-existent, Greece is being told it must take “prior actions” by Wednesday, including new laws on VAT hikes, pension cuts, and statistical office reforms, as well as ratification of the summit’s entire, seven-page austerity blueprint.

The creditors and the Eurogroup will formally scrutinise compliance before other eurozone parliaments vote on the summit terms.

Another proviso in the summit deal includes the return of the creditor institutions’ officials, the widely-hated, formerly called “troika”, to Athens.

Since February, at Athens' insistence, negotiations only took place in Brussels. In addition all "draft legislation in relevant areas" must first be shown to creditors before being put before Greek MPs.

Greek PM Alexis Tsipras also received next-to-no concessions on debt relief, which had - along with pensions and VAT - been one of his red lines.

"Nominal haircuts” were, once again, explicitly ruled out. Debt reprofiling will only be considered down the road "if necessary".

The deal saw Germany - Greece's biggest and most hardline eurozone creditor - receive flak on social media for pushing for such tough terms including a temporary eurozone exit, even after it was clear that Athens had backed down.

Berlin's hardline stance is popular at home, where public opinion has hardened against Greece. But it split the eurozone.

A rift emerged between those who supported a more conciliatory and political line towards Greece (including France and Italy), and those who sided with Germany (such as Finland and the Netherlands) for a more rules-based approach.

"There was in Germany rather strong pressure for a Grexit. I refused that solution," French president Hollande said after the meeting.

French experts had been instrumental in bringing a Greek deal back to the table ahead of the summit.

The entire weekend exposed the limits of the eurozone architecture, which is monetary union without a political union to back it up.

This meant the negotiations boiled down to whose democratic mandate counted for more: that of Tsipras, who pledged to end austerity, or that of Angela Merkel, the German chancellor?

It also meant talks had to take into account that the Finnish government might collapse if the Greek terms were too soft, or that other bailed-out states, such as Ireland or Portugal, did not want debt relief for Greece after having failed to get it for their own people.

Asked whether she felt the EU is now a “German Europe” in light of the summit deal, Merkel said: "I did not have that impression this morning".

Dutch PM Mark Rutte, for his part, noted that sending more money to Greece will mean that he’s breaking his electoral promise to the Dutch people.

Ireland's Enda Kenny said the summit was a "pretty bruising experience".

For his part, Juha Sipila, the Finnish PM, noted that Helsinki had been in favour of Berlin's proposal to eject Greece from the euro for five years.

He said he cannot guarantee that his parliament will accept to open negotiations on a third bailout.

It is also not sure whether Tsipras will be able to get the terms of the agreement through his parliament. Or that Merkel will get it through hers.

Tsipras, on his way out of the summit, said the deal "gives hope of recovery" but acknowledged it will be "difficult to implement".

Meanwhile, for ordinary Greeks, the austerity measures will continue and the answer to the question of when they can start withdrawing more than €60 a day from their bank accounts remains unclear.

Opinion

The EU's darkest day

Monday July 13 will go down in history as the day Greece lost its independence, the day democracy died in the country that invented it and the day the EU took a decisive step towards self-destruction.

EU urges Swiss to move on talks or face sanction

The EU commission tells Switzerland that clarifications to the draft deal are possible - but not renegotiations. The message is clear to 'Brexit' Britain as well: the Swiss model is over, there are no special agreements.

Frontex transparency dispute goes to EU court

The General Court of the European Union in Luxembourg will next month hold a public hearing on the refusal by Frontex, the EU's border agency, to release documents concerning its border control and surveillance operation known as Triton.

News in Brief

  1. New socialist group leader to push for Timmermans
  2. Romanian ex-PM frontrunner to head new liberal group
  3. France, Germany and Spain in fighter jet deal
  4. Tusk grilled in Poland over role as PM
  5. Italy is 'most credible' US partner in EU, says Salvini
  6. EU blames Sudan junta for killings and rapes
  7. Report: EU may suspend Turkey customs union talks
  8. Swiss stock exchange could lose EU access in July

Interview

Meet the lawyer taking the EU migration policy to the ICC

Juan Branco is a lawyer and co-author of a legal document submitted to the International Criminal Court (ICC) accusing EU officials and member states of crimes against humanity for their migration policies. "Some people should have to go to prison."

Agenda

Top EU jobs summit dominates This WEEK

A summit in Belgian capital this week will host heads of government and state to discuss top EU institutional posts. But before they meet, the jockeying for the Commission presidency will have already started among the European political groups.

Stakeholders' Highlights

  1. Nordic Council of MinistersNo evidence that social media are harmful to young people
  2. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  3. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  4. Nordic Council of MinistersEducation gets refugees into work
  5. Counter BalanceSign the petition to help reform the EU’s Bank
  6. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  7. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  8. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  9. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  10. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  11. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  12. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody

Latest News

  1. EU urges Swiss to move on talks or face sanction
  2. Frontex transparency dispute goes to EU court
  3. Commission goes easy on scant national climate plans
  4. Macron and Mogherini decline to back US accusation on Iran
  5. EU summit must give effective answer on migration
  6. Spain's Garcia set to be next Socialist leader in parliament
  7. Erdogan mocks Macron amid EU sanctions threat
  8. The most dangerous pesticide you've never heard of

Stakeholders' Highlights

  1. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  2. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  3. Nordic Council of MinistersNordic commitment to driving global gender equality
  4. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  5. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  6. Nordic Council of MinistersNordic talks on parental leave at the UN
  7. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  8. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  9. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  10. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  11. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  12. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law

Join EUobserver

Support quality EU news

Join us