European leaders compromise over Greece's bailout deal

Richard Edgar

Former Economics Editor

Greek Finance Minister Yanis Varoufakis speaking after the agreement tonight in Brussels. Credit: Reuters

Once again, European leaders have snatched compromise from the jaws of crisis, at the last moment tonight they agreed a deal to extend loans to Greece, staving off what would have been almost certain bankruptcy for the country.

The new Greek finance minister, Yannis Varoufakis, has come away with a deal which keeps his country solvent.

But at what a cost: he has capitulated on almost everything he and his prime minister asked for when they first arrived for a summit, with a fresh mandate from a people impoverished by five years of austerity.

Greece will have to adhere to almost all the conditions of the original bailout and will have to work over the weekend to submit by Monday a list of reforms that they will introduce.

Germany insists these are vital to a long-term economic recovery in Greece. I understand the German finance minister is privately "very satisfied" with the deal.

All this to buy just four more months. In June this loan programme runs out and the whole process starts again.

Tonight was a breakthrough but Greece will need many more.