Jew World Order

I think the important thing about this deal is that they have tried to get
Greece into a reasonable place vis-a-vis its debt sustainability […]
That’s been the crucial missing ingredient. They have not, in the past, come
up with a sustainable position for Greece. I think they have made real
progress now towards giving a sustainable debt position for Greece.

Of course the Greek people, the Greek political system has to deliver
really difficult decisions now but I don’t think Greece has any other
option.

Hopefully we can all move on now and get the European economy growing.

_{EU finance ministers, including George Osborne (third from left), gather
for a meeting on Tuesday. The Ecofin meeting traditionally follows the
Eurogroup meeting (Photo: AP)}

08.55 Back to the Greek deal, where BBC
business editor Robert Peston offers his thoughts (he has three):

First, that if private sector lenders sign up to what their negotiators
have agreed with the Greek government, it will be momentous: a reduction of
53% or 107bn euros ($142bn; £90bn) in the face value of what the Greek
government has borrowed. […]

Second, I don’t know whether it matters that eurozone central banks and
governments are making a different sacrifice in respect of their holdings of
Greek government bonds than the sacrifice being made by commercial banks and
other private sector lenders. […]

Finally, and to state the bloom’ [sic] obvious, what we had
overnight is an agreement in principle, not a final definitive rescue of
Greece.

Before we crack open the vintage Ouzo, let’s just see how it goes down with
the relevant private-sector lenders, politicians in the only creditor
country that really matters – Germany – and Greek citizens, who are being
asked to sign up for years of declining living standards with no promise
about when and whether the better times may return.

_{A shoe shiner tries to keep warm next to an hourglass graffiti in Athens
on Monday (Photo: AP)}

08.37 Stock markets are slightly down this morning. The FTSE 100
in London is currently down 0.3pc at 5,927.21, while the CAC 40 in
Paris is trading 0.31pc lower at 3,461.87 and Frankfurt’s DAX 30 is
down 0.25pc at 6,930.63.

As City editor Richard Fletcher says in this
morning’s City briefing:

Buy on the rumour sell on the fact – goes the old stock market adage.

08.29 Earlier this morning, Greek economist Yanis Varoufakis
told BBC News that leaders were still in “big denial over Greece”.
He insisted:

Greece has now officially defaulted. Europe has managed to find a euphemism
for it – it’s calling it a second bail-out.

He stressed the importance of interest rates matching the country’s rate of
growth, adding:

…if those numbers are out of sync, then you have a disaster on your hands.

Mr Varoufakis appeared on Channel 4 News last night arguing for
an alternative plan of action. Read
more on his blog.

08.20 Former Chancellor Alistair
Darling is speaking on Radio 4’s Today programme:

He says that last night’s deal was necessary as “both sides are over a
barrel […] Greece needs the money, the eurozone needed it because the last
thing it wants is collapse.”

However, he adds that even if Greece “does everything is asked of
it,” by 2020, its debt to GDP ratio will still be 120pc, and he asks if
this is a “realistic” level to get it out of the mess it is in.

Greece will be back at the table in some point – and other countries could be
back as well […] Europe [has a ] dark cloud hanging over it, the best you
can forecast is it bumps along the bottom.

What is so depressing is that this argument was had in the 1930s. I think
that Europe generally has got itself into some terrible problems. Greece has
underlying problems. As for what happened last night, it needed to be done,
but it does not get Greece out of the woods.

08.10 All this was nearly overshadowed by a damning troika report
leaked last night, suggesting Greece could need a bail-out of up to
€245bn if Greece’s didn’t go to plan:

The debt trajectory is extremely sensitive to program delays, suggesting that
theprogram could be accident prone, and calling into question
sustainability.

Read the full leaked report here (page 6 has the damning bit – click on the
link below to enlarge):

Greek Sustainability Proposal

08.04 The full
Eurogroup statement is here. The committee leading negotiations for
banks also released a statement in the early hours. It was keen to emphasise
that Greece was the exception, not the rule when it comes to debt
write-downs. Portugal (which has always denied any talk of debt
restructuring), take note:

The Co-Chairmen said that the agreement would contribute to the broader
efforts of the Euro Area to resolve sovereign debt problems while supporting
global growth and financial stability. They emphasized that the
unprecedented nature of the package underpinning the consensual resolution
of debt restructuring discussions with Greece reflects the exceptional and
unique circumstances of Greece and the broader context of European
government bond markets.

07.59 Here’s a clip of Mr Juncker and Monetary Affairs
Commissioner Olli Rehn discussing the “marathon talks”:

07.55 Greek Prime Minister Lucas Papademos was also “very
happy” with the deal, and said he was confident that the country would
hold up its end of the bargain. He told reporters:

I’m convinced that the government after election will also be committed to
implement the programme fully… because it is in the interests of the Greek
people […] It’s not an exaggeration to say that today is of historic
importance for the Greek economy. We have no luxury for delays.

_{Greek Finance Minister Evangelos Venizelos (L) and Greek Prime Minister
Lucas Papademos give a joint press after their Eurogroup Council meeting
(Photo: Getty)}

07.49 Eurogroup President Jean-Claude Juncker described the
agreement as “far reaching” and added that private sector
involvement:

would lead to a significant debt reduction for Greece and pave the way
towards an unprecedented amount of new official financing being provided by
the EFSF to secure Greece’s future in the euro area.

07.38 Brussels correspondent Bruno Waterfield has been following
events throughout the night. More from him:

In return for the new bailout, Greece must implement a savage austerity
programme, accept an “enhanced and permanent” presence of EU officials
supervising Greek finances and set up a blocked account with three months
debt interest payments in it at any time.

“The Greek economy can no longer rely on a large administration financed by
cheap debt, but by investment to facilities new growth and jobs,” said Olli
Rehn, the EU’s economic and monetary affairs commissioner.

However the agreement was overshadowed by the pessimistic debt
sustainability report compiled by the IMF, ECB and Commission, that warned
of a “downside scenario” of Greek debt hitting 160pc of GDP in 2020 – far
higher that the agreed 120.5pc target.

_{Long night? Luxembourg Prime Minister and Eurogroup president Jean-Claude
Juncker scratches his eyes during a press conference (Photo: AFP).}

07.25 In a nutshell:

• Eurozone leaders have agreed a programme that will cut Greece’s
debt pile to 120.5pc of GDP in 2020. This ensures IMF participation.
The IMF will announce how much it is willing to cough-up in March.

• To get to this magic 120pc figure, private investors will take
a 53.5pc hit on their holdings of Greek debt – more than the 50pc
agreed in October. According to JP Morgan, this represents a real
loss of 75pc (compared with 70pc on a 50pc haircut). This will reduce
privately held Greek debt by €107bn.

• Investors have also accepted lower initial interest rates on
new bonds. Rates will start at 2pc and increase to 3pc between 2015 and
2020. From February 2020, the rate will be 4.3pc. Until now, discussions had
assumed a coupon of 3pc between now and 2020, rising to 3.75pc from 2020 to
maturity.

• Eurozone governments will take a further hit on the loans made
to Greece in its inital 2010 bail-out.

• The ECB will also pass profits it made from its
purchases of Greek bonds back to Athens via central banks.

• To make sure all goes smoothly, Big Brother will be watching.
Permanently. The troika (made up of the ECB, IMF and EU), will have
an “enhanced and permanent presence on the ground in Greece” to
make sure the country holds up its end of the bargain.

• An ‘escrow’ account will be set up to service Greek debts. It
will hold three months debt interest payments at any time.

06.56 And they all lived happily ever after…again.

It promised to be a long night in Brussels, and after a 14 hour marathon
meeting, Jean-Claude Juncker, President of the Eurogroup, emerged
with International Monetary Fund head Christine Lagarde, EU
Commissioner Olli Rehn and eurozone bail-out fund boss Klaus
Regling to tell us all will be OK in euroland.

_{(L-R) EFSF CEO Regling, IMF Managing Director Lagarde, Eurogroup chairman
Juncker, and European Monetary Affairs Commissioner Rehn hold a joint news
conference after a Eurogroup meeting in Brussels (Photo: Reuters)}

06.50 Good morning and welcome back to our live coverage of the
eurozone debt crisis.

Debt crisis
live: archive