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.