(CN) – Wary leaders from EU member states tentatively agreed to toss Greece another economic lifeline – provided the Greek government can pass key financial and judicial reforms in the next 10 days.
After a marathon weekend of talks in Brussels between the leaders of nations that use the euro as currency – known as the Eurogroup – and Greek Prime Minister Alexis Tsipras, EU leaders agreed in principle to a third bailout for the Hellenic Republic that could amount to $95 billion over three years.
But the bailout comes not with strings, but with giant marine ropes: Tsipras has until Wednesday to convince Greek legislators to pass increases on sales and income tax and reform the nation’s pension scheme to continue the bailout negotiations, sticking points that derailed previous deals between Greece and the 19-nation eurozone throughout 2015.
And by July 22, Greek lawmakers must pass a complete overhaul of the nation’s civil justice system by adopting a code of civil procedure before Eurogroup members will even take the bailout to their parliaments for approval.
If Tsipras can pull off the reforms, eurozone leaders indicated willingness to hand over $13 billion in bridge loans to keep Greek banks solvent and to allow the nation to make a loan payment to the European Central Bank scheduled for July 20.
As for money Greece already owes from the previous two bailouts, EU leaders said they will consider grace periods and payment modifications but stressed that “nominal haircuts on the debt cannot be undertaken.”
The European Commission will also provide a $39 billion growth and jobs package that will likely be tightly controlled, given the commission’s role as the continent’s regulatory body.
“There will not be a ‘Grexit,'” commission president Jean-Claude Juncker said, referring to the name given to Greece’s possible exit from the eurozone. “In this compromise there are no winners and no losers. I don’t think the Greek people have been humiliated, or that the other Europeans have lost face. It’s a typical European arrangement.”
Tsipras also said he hoped the possibility of a “Grexit” is in the past.
“We averted the plan for a financial strangulation and for the collapse of the banking system,” he said.
Greece has borrowed nearly $257 billion from lenders – including the ECB, the International Monetary Fund, Germany, the Netherlands and others – since 2010.
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