Tsipras Bluff Fails as Deal Finally Reached

A unanimous agreement on a Greek bailout has been agreed according to European Council President Donald Tusk following through-the-night talks between senior officials. The agreement is going to be a bitter pill to swallow for the Greek people, only a week after they rejected what was probably a more palatable version in the referendum.

The referendum was a last ditch effort by Greek Prime Minister Alexis Tsipras to pile the pressure on the country’s creditors but in the end the risk backfired and he appears to have now been forced into a humiliating U-turn. A few more hurdles remain with Greek MPs now needing to firstly pass the package through parliament, which is far from guaranteed, as well as certain reforms which will act as a guarantee to the creditors, who had lost faith in the government to stand by their promises.

Markets have responded very positively to the news, which comes following months of uncertainty and increasing fears that Greece could suffer a messy exit from the eurozone. The euro saw an initial positive reaction to the deal, although those gains have been largely pared at this stage, European indices have opened very strongly and periphery debt yields are on the decline.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.