Greece finally reached multi-billion euro deal with creditors

Europe breathed a collective sigh of relief today (August 11th) when news broke that Greece had finally reached a multi-billion euro bailout agreement that has the potential to save the country from financial ruin. 

After a marathon negotiation session - lasting 23 hours - both parties reached accord, but the deal must still be adopted by the Greek parliament and accepted by various governments across the eurozone. 

Friday will see European finance ministers meet to put the finishing touches to the deal, giving Athens some breathing space before they have to repay €3.2 billion to the European Central Bank on August 20th.

On the surface, it appears that this latest round of talks has resolved all of the final niggles that have stood in the way of an agreement in the past. 

The path to reaching a deal was made much easier when prime minister Alex Tsipras and his government seemingly acceded to creditors' demands - despite holding a referendum that saw the proposals rejected by the public. 

According to Reuters, on announcing a resolution had been reached, an official from the Greek Finance Ministry said: "Finally, we have white smoke. An agreement has been reached."

As it currently stands, there are just one or two kinks to iron out, if finance minister Euclid Tsakalotos is to be believed. This boosted Greek shares, while the banking index enjoyed a surge of six per cent and two-year bond yields fell by more than four per cent.

Annika Breidhardt, a spokesperson European Commission (EC), said: "The institutions and the Greek authorities achieved an agreement in principle on a technical basis. Now as a next step, a political assessment will be made."

While the fact that a deal has been reached, officials from northern Europe remain dubious and are eagerly waiting for the deal to be given the final seal of approval.  Alexander Stubb, Finland's finance minister, admitted that there is still a long way to go and everyone involved needs "to take one step at a time", adding that "agreement is a big word".  

Later today, EC president Jean-Claude Juncker is due to meet German chancellor Angela Merkel and French president Francois Hollande - two people the media have portrayed as sticking to a hard line during negotiations. 

Once the deal has been signed off, Greece can move on from the pain it has experienced recently, as it has been battling against austerity since the global financial crash of 2008 and has ultimately had to concede to its international creditors. The promises that helped the Syriza party get into power in January have long since been forgotten, disappearing under the pressure placed on the nation by the eurozone. 

An official from the Greek Finance Ministry has confirmed that the agreement could be worth as much as €85 billion, released over a period of three years. A sum of €10 billion would immediately be released to the country's banks and would be recapitalised by the end of 2015.

The deal is expected to be agreed upon by Greece's parliament by Thursday at the latest and is due to be scrutinised by eurozone finance ministers by the end of this week. Mr Tsipras will be relying heavily on support from the opposition, as many members of his own party have distanced themselves from the talks. 

Once ratified, the prime minister is expected to take the helm of his party and face his critics at a congress next month, which could lead to another election. Even if Syriza manages to stay in power, many analysts believe the leftist government will not be able to implement the severe terms of the deal, as it contradicts everything the party stands for.