08.41
Antonio
21 February 2012 Last updated at 09:58 ET
Blind people were protesting against the cuts in Athens on Tuesday
Eurozone leaders said the deal had saved Greece from a default.
But Greeks face new spending cuts and state sector job losses in order to slash national debt within eight years.
Austerity measures implemented under the 2010 bailout, which was worth 110bn euros, sparked violent protests.
News of the deal was greeted with a mix of resignation and anger among the Greek public, correspondents say.
Under the deal hammered out in Brussels
The country has just over a week to approve a round of spending cuts of more than 3bn euros tied to the bailout.
Continue reading the main story
While the cuts should be passed by the current parliament, it is unclear how the constitutional amendment on debt repayment will fare when it comes before MPs within the next two months.
An early general election is expected to be held in April, putting pressure on Greece's mainstream socialist and conservative parties.
Trade unions have called for new street protests on Wednesday and the head of the opposition Communist party has vowed to oppose new cuts.
"We insist on daily struggle to thwart the measures and this struggle cannot be a defensive one," said Aleka Papariga.
The prospect of permanent eurozone monitoring is also seen by many Greeks as a blow to national pride.
"We are like drug addicts who have just been given their next dose, this is what they've reduced our country to," retired nurse Ioulia Ioannou, 70, told Reuters news agency in Athens.
"For the first time, I'm embarrassed to say I'm Greek."
'Greek problem'
The German and Dutch parliaments will vote on the bailout next week, amid strong reservations over lending more money to Greece.
German Finance Minister Wolfgang Schaeuble recently caused an outcry by suggesting that Greece was a "bottomless pit".
But European Commission chief Jose Manuel Barroso said on Tuesday the new loans package would prevent "an uncontrolled default with all its grave economic and social implications".
Greece, he added, had no alternative but to pursue fiscal consolidation and structural reform.
Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said the bailout would "secure Greece's future in the euro area".
Italian Prime Minister Mario Monti, himself a technocrat brought in to turn around his country's finances, said: "It's an important result that removes immediate risks of contagion."
Swedish Finance Minister Anders Borg said that while the Greeks remained "stuck in their tragedy" the talks had "reduced the Greek problem to just a Greek problem".
The agreement was thrashed out over 13 hours at talks involving the international "troika" of the IMF, the European Central Bank and the European Commission.
Blind people were protesting against the cuts in Athens on TuesdayThe Greek cabinet is to meet for talks on launching the painful reform process stipulated by creditors in return for a massive bailout and debt write-down.
Loans of more than 130bn euros (£110bn; $170bn) and a write-down of at least 107bn were agreed overnight at marathon talks in Brussels.Eurozone leaders said the deal had saved Greece from a default.
But Greeks face new spending cuts and state sector job losses in order to slash national debt within eight years.
Austerity measures implemented under the 2010 bailout, which was worth 110bn euros, sparked violent protests.
News of the deal was greeted with a mix of resignation and anger among the Greek public, correspondents say.
Continue reading the main story
Among European officials and ministers, there is a huge sigh of relief. The country that has been at the heart of the eurozone's debt crisis has, for the moment, been taken off the critical list.
But it comes at a price. Permanent monitors from the EU, the IMF and the ECB will be placed on the ground in Athens to ensure there is no back-sliding. It is a humiliating and unprecedented intrusion into Greece's sovereignty.
To the question of whether growth will return to this battered economy, there is a shaking of heads. Perhaps in a decade, I am told. The risk is that the new cuts will only deepen an existing recession.
And the question remains: is Greece's future secure, or has this deal just bought time for the eurozone to build greater protection around its banks and around potentially vulnerable countries like Spain and Italy?
Among European officials and ministers, there is a huge sigh of relief. The country that has been at the heart of the eurozone's debt crisis has, for the moment, been taken off the critical list.
But it comes at a price. Permanent monitors from the EU, the IMF and the ECB will be placed on the ground in Athens to ensure there is no back-sliding. It is a humiliating and unprecedented intrusion into Greece's sovereignty.
To the question of whether growth will return to this battered economy, there is a shaking of heads. Perhaps in a decade, I am told. The risk is that the new cuts will only deepen an existing recession.
And the question remains: is Greece's future secure, or has this deal just bought time for the eurozone to build greater protection around its banks and around potentially vulnerable countries like Spain and Italy?
Responding to a remark by Prime Minister Lucas Papademos that it was a "historic day for the Greek economy", blogger Zoe Mavroudi tweeted: "Every time our unelected banker PM Papademos says 'historic day' please replace 'historic' with 'black'."
International financial experts have warned that Greece will need more help if it is to meet its debt reduction target.Under the deal hammered out in Brussels
- Greece will undertake to reduce its debt from 160% of GDP to 120.5% by 2020
- Private holders of Greek debt will take losses of 53.5% on the value of their bonds, with the real loss as much as 70%
- Greece's economic management will be subjected to permanent monitoring by eurozone experts on the ground
- Greece will amend its constitution to give priority to debt repayments over the funding of government services
- Greece will set up a special account, managed separately from its main budget, that must always contain enough money to service its debts for the coming three months
The country has just over a week to approve a round of spending cuts of more than 3bn euros tied to the bailout.
Continue reading the main story
What went wrong in Greece?
- Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
- Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
- The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
- Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
- There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
- Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.
- In 2010, the EU, IMF and ECB agreed a bailout worth 110bn euros (�92bn; $145bn) for Greece. Prime Minister George Papandreou quit the following year while negotiating its follow-up.
- Lucas Papademos, who succeeded Mr Papandreou, has negotiated a second bailout of 130bn euros, plus a debt writedown of 107bn euros. The price: increased austerity and eurozone monitoring.
Tax and pensions will be affected, Finance Minister Evangelos Venizelos told reporters.
A meeting of the Greek coalition cabinet has been called for Tuesday evening, after which the cuts may be tabled to parliament for a vote on Wednesday.While the cuts should be passed by the current parliament, it is unclear how the constitutional amendment on debt repayment will fare when it comes before MPs within the next two months.
An early general election is expected to be held in April, putting pressure on Greece's mainstream socialist and conservative parties.
Trade unions have called for new street protests on Wednesday and the head of the opposition Communist party has vowed to oppose new cuts.
"We insist on daily struggle to thwart the measures and this struggle cannot be a defensive one," said Aleka Papariga.
The prospect of permanent eurozone monitoring is also seen by many Greeks as a blow to national pride.
"We are like drug addicts who have just been given their next dose, this is what they've reduced our country to," retired nurse Ioulia Ioannou, 70, told Reuters news agency in Athens.
"For the first time, I'm embarrassed to say I'm Greek."
'Greek problem'
The German and Dutch parliaments will vote on the bailout next week, amid strong reservations over lending more money to Greece.
Jose Manuel Barroso: "I am aware of the heavy burden that the Greek people are having to bear"
But European Commission chief Jose Manuel Barroso said on Tuesday the new loans package would prevent "an uncontrolled default with all its grave economic and social implications".
Greece, he added, had no alternative but to pursue fiscal consolidation and structural reform.
Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said the bailout would "secure Greece's future in the euro area".
Italian Prime Minister Mario Monti, himself a technocrat brought in to turn around his country's finances, said: "It's an important result that removes immediate risks of contagion."
Swedish Finance Minister Anders Borg said that while the Greeks remained "stuck in their tragedy" the talks had "reduced the Greek problem to just a Greek problem".
The agreement was thrashed out over 13 hours at talks involving the international "troika" of the IMF, the European Central Bank and the European Commission.
21 Feb, 2012
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Source: http://www.bbc.co.uk/go/rss/int/news/-/news/world-europe-17116021
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