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French president: EU’s new bailout deal to help Greece stay in eurozone

July 13, 2015, 13:21 UTC+3 BRUSSELS

The European leaders have managed to achieve the main goal of the negotiations and "keep the unity, integrity and solidarity of the eurozone," Francois Hollande said, summing up the talks results

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French president Francois Hollande

French president Francois Hollande


BRUSSELS, July 13. /TASS/. A new bailout deal reached at a summit of eurozone countries will allow debt-laden Greece to stay in the euro area, French President Francois Hollande said after marathon talks on the Greek debt crisis in the Belgian capital on Monday.

The leaders of eurozone nations agreed after all-night negotiations on the foundations of a new bailout program for Greece that stipulated profound reforms in the Hellenic Republic and the EU’s financial support.

"This agreement allows Greece to stay in the eurozone on condition that it complies with the EU rules," Hollande said, summing up the results of the Greek debt talks.

The European leaders have managed to achieve the main goal of the negotiations and "keep the unity, integrity and solidarity of the eurozone," the French president said.

"The goal was also to give hope to Greece and the Greek people," Hollande said.

Aid for Greece

An agreement with Greece has been reached and the terms of starting negotiations on a new aid package have been worked out, German Chancellor Angela Merkel said at a press conference in Monday.

"We have opened the way for new aid," the German chancellor said, adding all the conditions were present for starting negotiations on an aid program for Greece as part of the European Stability Mechanism (ESM).

The EU’s aid for Greece may reach €82-86 billion over three years, the German chancellor said.

The Eurogroup of eurozone finance ministers "is ready to agree on additional measures, if necessary, but Greek debt write-off is not on the agenda, the German chancellor said.

The Greek parliament must "adopt basic legislative acts on reforms before July 15," Merkel said.

Top priority measures include the reform of value-added tax (VAT), reorganization of the national statistical agency and changes in the Greek pension system, the German chancellor said.

The national parliaments of eurozone countries, including the German Bundestag, will vote on a third bailout package for Greece, only after Athens adopts necessary legislative acts and this process gets approval from the European Commission, the International Monetary Fund and the European Central Bank, Merkel said.

Before July 22, Athens should pass other laws, including on banks’ recapitalization, the German chancellor said.

"We have managed to reach agreement, although confidence was lost," Merkel said.

"Athens still has to negotiate a long and difficult path," the German chancellor said.

Meanwhile, Greek Prime Minister Alexis Tsipras has said Greece will continue restoring its sovereignty.

"We have prevented a plan stipulating financial infringement and the collapse of the banking system," Tsipras said after the eurozone summit.

"We had carried out a difficult struggle for six months for reaching a better agreement [with international creditors], which would allow us to get to our feet," the Greek premier said.

"We were confronted with tough decisions and we took tough decisions to prevent a scenario preferred by the most radical circles in Europe," Tsipras said.

"Today’s decision will help keep financial stability in Greece and give possibilities for recovery but we knew that this would be an agreement, the implementation of which would be difficult," the Greek premier said.

Referendum in Greece

The EU’s new bailout deal follows a referendum held in Greece on July 5, in which Greek Prime Minister Tsipras urged Greeks to reject the international creditors’ ultimatum for tight austerity measures in the country in exchange for bailout funds.

The referendum results showed that most Greeks (61%) voted against the creditor terms.

Since 2010, when Greece’s sovereign debt crisis broke out, Athens has received 240 billion euros in bailout loans from the EU and the International Monetary Fund (IMF). Despite a partial debt write-off in 2012, Greece’s sovereign debt currently exceeds 315 billion euros or 175% of its GDP. This figure is almost three times the debt-to-GDP ratio set for the eurozone countries, which should not exceed 60% of GDO according to the EU’s Stability and Growth Pact.

Greece’s international creditors say the Hellenic Republic can receive further financial aid, if the government undertakes to implement further austerity measures in the country.

Tsipras earlier urged the international creditors to write off 30% of Greece’s debt.

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