Tsipras finds deal with EU as only way for Greece to remain in eurozone

YEREVAN, JULY 15, ARMENPRESS. The International Monetary Fund has added its voice to the growing criticism of the draconian reformsGreek Prime Minister Alexis Tsipras agreed to as part of an €86 billion bailout deal. With Tsipras facing a potentially fatal split within his ruling Syriza party and Greeks taking to the streets in protest at the terms of the agreement, the IMF suggested that the debt repayment measures forced upon the country are unsustainable and should be eased. As Armenpress informs citing “Daily Mail,” in a scathing attack, the IMF said Greece will never be able to pay back the borrowed billions under the current loan agreement and creditors will have to accept they will never get all the money back.

Earlier Tsipras revealed that even he does not believe in the tough bailout deal offered by eurozone leaders but said he only agreed to implement it to save the near-insolvent country, adding that he has no intention of resigning.The news comes as Greece gears up for this afternoon's parliamentary vote on the reforms, which will not be passed unless Tsipras convinces his Syriza colleagues to unite behind him and agree that the tough austerity measures are the only way to stop Greece crashing out of the euro.

Defending the terms, Tsipras said the 'bad deal' was the best available under the circumstances. He said: 'I assume responsibility for all mistakes I may have made, I assume responsibility for a text I do not believe in, but which I signed to avoid disaster for the country, the collapse of the banks.'

Tsipras also predicted that 'the great majority of Greek people' will support the deal, but admits he 'cannot say with certainty' that it will be enough to stop Greece exiting the eurozone - a so-called 'Grexit' - until the final bailout agreement is signed.The International Monetary Fund also condemned the bail-out, warning that Greece's finances were even more dire than previously reported. Its analysis pointed to Greek government debt reaching a peak of close to 200 per cent of the country's economic output over the next two years, which it called 'highly unsustainable'.'Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,' it added. Greece is gearing up for this afternoon's parliamentary vote on draconian reforms.

The outcome of the crucial vote was far from clear after the IMF issued its stark warning that Greece would need far more debt relief to stop it crashing out of the common currency than European governments have so far been willing to contemplate. The last-ditch deal struck Monday saw Tsipras agree to sweeping changes to labour laws, pensions, VAT and other taxes - many of which had been rejected by voters in a public referendum - in exchange for new funds to keep Greece's struggling economy alive. The parliament in Athens must approve the deal before the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to €86 billion euros - its third rescue programme in five years. Under the new plan, eurozone governments will contribute between €40 and €50 billion, the IMF will contribute another major chunk and the rest will come from selling off state assets and the financial markets, a European official said. A senior IMF official also said the fund would only participate in a third bailout if its EU creditors produce a clear plan. The current deal 'is by no means a comprehensive, detailed agreement', the official said. It was not the first time the IMF has urged greater debt relief. But political analysts questioned why the strongly-worded report - which creditors were aware of on Sunday, two days before it was published - appeared not to have been taken into account in the agreement.

The revelations put greater strain on Tsipras, who has been forced to turn to pro-European opposition parties to get the reform measures through parliament in the face of opposition from some 30 rebel lawmakers in his own radical left Syriza party. The embattled premier said he took 'full responsibility' for signing an accord he did 'not believe in, but which I signed to avoid disaster for the country' as it teetered on the brink of economic collapse. 'A prime minister must fight, speak the truth, take decisions and not run away,' Tsipras said in an interview on Greek public television, when asked whether he would resign if the reforms fail to pass or he loses his parliamentary majority. Greece's finance ministry says the banks will remain closed through Thursday. The ministry says the transactions that can be carried out at the few bank branches that are allowed to open are being broadened.Apart from allowing pensioners without bank cards to withdraw €120 per week, they will also process payments for credit card bills, debts to the state like taxes and utility bills, and insurance company bill payments. They will also allow the transfer of funds between accounts in the same bank. Banks have been shut in Greece since June 29 and capital controls have been imposed restricting ATM cash withdrawals to €60 per day, and to €120 per week for pensioners and the unemployed without bank cards.Credit and debit card payments within the country are allowed, as are electronic banking transactions within the country.Bill payments abroad or sending funds abroad require special permission.Tsipras ally Panos Skourletis, minister for employment, urged lawmakers to 'vote for the bill', saying the government would 'reduce the painful consequences of this agreement'.

But Syriza's hardline leftists, lead by Energy Minister Panagiotis Lafazanis, were reported by Greek media to have decided not to vote for the measures but call instead for a return to the drachma. Polls published late Tuesday by Kapa Research found 72 percent of Greeks surveyed thought the deal was necessary, with the majority blaming Europe for the 'tough measures', but many see it as a humiliating climbdown for a country still reeling from years of painful austerity. Civil servants went on strike Wednesday, the first big stoppage since the 40-year-old took power. But despite the turmoil his popularity seemed undented, with 68.1 per cent of people saying that if the political fallout from the vote should result in a new coalition, it should be led by Tsipras. Under the deal, Greek assets for privatisation will be parked in a special fund worth up to 50 billion euros, with some 25 billion euros of the money earmarked to recapitalise Greece's banks. Tsipras said the establishment of the fund meant ordinary Greeks' savings were safe, but added that the reopening of the banks - which have been closed for over a week - depended on the finalising of the deal, which could take a month. This morning a German official says criticism by Tsipras of the preliminary bailout deal with creditors isn't helpful. Deputy finance minister Jens Spahn criticized Tsipras' comments last night, telling ARD television: 'This is not just about saving (money); it is about this country needing an idea of how it wants grow economically again, how it wants to be successful, change structures and win trust.' He added: 'If someone then says, `I don't actually stand by what I'm doing now,' I find that difficult. That doesn't necessarily create trust.'

The European Central Bank has been keeping Greek banks afloat with emergency liquidity, but it could be forced to cut off that aid if Greece misses a huge debt repayment due on Monday. European governments on Tuesday also clashed over options to help Greece meet its short-term cash needs while it waits for a eurozone bailout deal to be finalised, likely to take at least four weeks. In a sign of the ongoing concern about the global fallout of the Greek crisis, US Treasury Secretary Jacob Lew will travel to Germany and France on Wednesday and Thursday for talks with top officials. If Greece does pass the agreement, Europe's next step would be to push the deal through several national parliaments, many in countries that are loath to afford Athens more help.In Washington, the White House hailed the deal on Greece as 'a credible step' on the long path to economic growth and debt sustainability in the hard-up country. And French President Francois Hollande insisted there was no Greek humiliation in the deal struck in Brussels. Tsipras has predicted 'the great majority of Greek people will support' the deal, which he said includes help to ease Greece's huge burden of debt and revive its crippled banking system. The last-ditch deal is aimed at keeping Greece's economy afloat amid fears its cash-starved banks were about to finally run dry and trigger its exit from the single currency. Many ordinary Greeks however are sceptical that the deal will bring about any improvement in their lives. Some expressed their anger on social media, where the Twitter hashtag #ThisIsACoup trended. Greece's public servants are also to stage a 24-hour strike on Wednesday, the first big stoppage since Tsipras took power. Haralambos Rouliskos, a 60-year-old economist, described the deal as 'misery, humiliation and slavery'. The Eurozone creditors 'are trying to blackmail us,' said Katerina Katsaba, a 52-year-old working for a pharmaceutical company.

Faced with a Eurozone deeply distrustful of Athens after five months of tense meetings, the 40-year-old Tsipras had to agree to demands that critics say rob Greece of financial independence. 'This agreement may pass with (opposition party) votes, but it will never pass the people,' the head of a hardline Syriza faction, Energy Minister Panagiotis Lafazanis, said. If Greece passes the deal, Europe's next step would be to push the deal through several national parliaments, many in countries that are loath to afford Athens more help. Germany's Bundestag is likely to vote on Friday, provided the Greek parliament rushes through the four new market-oriented laws by Wednesday. Despite strong opposition, Tsipras also yielded to a plan to park assets for privatisation worth up to 50 billion euros in a special fund. Some 25 billion euros of the money in that fund will then be used to recapitalise Greece's cash-starved banks. There is also a pledge to reverse laws brought in by the Syriza government that run counter to Greece's earlier bailout arrangements in 2010 and 2012. The deal contains little mention of relieving a Greek debt mountain worth 180 percent of GDP - a step recommended by the IMF - beyond a vague mention that it should be considered later.