Greek debt crisis: Tsipras vows not to 'abandon ship'; IMF urges massive debt relief - as it happened

Graeme Wearden and Nick Fletcher

from on 2015-07-14 23:07 (#E8BC)

Greek prime minister tells state television that Sunday's bailout deal was a bad night for Europe, but he won't walk away.

Read today's Greek news live blog

11.59pm BST

We've now got hold of the new IMF report into Greece's debt sustainability.

And a quick perusal shows that the Fund has comprehensively obliterated the notion that this third Greek bailout will work, as it stands.

Greece's public debt has become highly unsustainable. This is due to the easing of policies during the last year, with the recent deterioration in the domestic macroeconomic and financial environment because of the closure of the banking system adding significantly to the adverse dynamics.

The financing need through end-2018 is now estimated at a85bn and debt is expected to peak at close to 200 percent of GDP in the next two years, provided that there is an early agreement on a program. Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.

The events of the past two weeks-the closure of banks and imposition of capital controls-are extracting a heavy toll on the banking system and the economy, leading to a further significant deterioration in debt sustainability relative to what was projected in our recently published DSA.

Medium-term primary surplus target: Greece is expected to maintain primary surpluses for the next several decades of 3.5 percent of GDP. Few countries have managed to do so. The reversal of key public sector reforms already in place- notably pension and civil service reforms-without yet any specification of alternative reforms raises concerns about Greece's ability to reach this target

11.41pm BST

This is important. IMF says Greece needs 30yr grace period on its debt. Even bigger debt relief https://t.co/JRbGA8Wyn7

11.19pm BST

IMF won't take new #Greece programme to board unless there is a solution to debt problem

11.19pm BST

THIS IS IT. The IMF stating as bluntly as it can that Europe must decide between giving Greece a 30-year grace period to repay its debt, and accepting the reality that serious haircuts must be taken:

IMF: Greece debt "highly unsustainable" - needs up front haircut or dramatic maturities extension and grace period pic.twitter.com/0YuWG2Va7j

11.12pm BST

Some late breaking news: The International Monetary Fund has confirmed today's leaked report which warned that Greece needs much more debt relief than the eurozone has accepted:

Here's the details;

IMF on Greece: a85bn may not be enough due to optimistic surplus and growth targets: pic.twitter.com/6pEmtovW47

10.43pm BST

Heads-up: the process of driving Greece's bailout deal through parliament will start early:

#Greece | Prior actions draft bill to be introduced to parliamentary committees and plenary tomorrow 0700 GMT.

10.04pm BST

Even if you think Alexis Tsipras has misplayed the crisis, it's hard not to be impressed by his composure in tonight's interview.

"Last night was a bad night for Europe."

"To be frank, here, they [eurozone countries] are not only forced to give fresh money, but to give 82 billion, and are accepting the restructure of debt."

"I am fully assuming my responsibilities, for mistakes and for oversights, and for the responsibility of signing a text that I do not believe in, but that I am obliged to implement,"

"The hard truth is this one-way street for Greece was imposed on us,"

That #Tsipras spoke of #Greece suffering post-traumatic stress at moment says all you need to know about what kind of w/e he had #Greece

"The worst thing a captain could do while he is steering a ship during a storm, as difficult as it is, would be to abandon the helm."

So, hats off to @tsipras_eu at last?

#Tsipras overarching theme: #Greece backed into corner. Doesn't believe in agreement. Bad night for Europe. But signed "to avoid disaster"

9.20pm BST

What about the big question ahead of tomorrow night's vote on the bailout -- might you resign?

Tsipras says that "A captain cannot abandon ship" during a storm.

9.11pm BST

So, is the threat of Grexit finally off the table?

Tsipras says that, until the bailout deal is finalised, nothing is certain.

Greek PM @atsipras asked if #Grexit finally avoided: I cannot say anything with certainty before the deal finally signed. #greekment

9.09pm BST

We won't reverse the measures we have taken this year, the PM insists (so the cleaning ladies re-instated after a long campaign may be safe)

Greek PM @atsipras: There is no issue of recalling laws considered to be unilateral by the creditors. #greekment

9.06pm BST

Backstage from the #Tsipras interview (via @geoterzis) #Greece #erttsipras #greekment #rbnews pic.twitter.com/E1lsVX2beX

9.02pm BST

Whose phone was it? #Tsipras https://t.co/aNUZdpeWBq

9.02pm BST

Comedy moment as a phone rings somewhere offstage.....

8.58pm BST

The hugely controversial a50bn privatisation fund could have been worse, Tsipras says.

Initially it was all going to pay down debt (Merkel's demand); now half is going to recapitalise the banks.

.@tsipras_eu at first the sales from the privatization fund were only going to debt payments. Now it also goes to bank recapitalization.

8.55pm BST

.@atsipras repeats few times that whatever mistakes Varoufakis made it is his (the PM's) responsibility.

8.54pm BST

Tsipras concedes that Yanis Varoufakis made mistakes, but takes responsibility for them himself. Great economists don't always make good politicians....

#Tsipras "Being an excellent academic, doesn't necessarily make one a good politician" #Greece

Greek PM @atsipras: I cannot blame @yanisvaroufakis for mistakes made. I take the responsibility, I am the prime minister. #Greekment

8.52pm BST

Tsipras reveals that he challenged the German chancellor earlier this year, once former finance minister Yanis Varoufakis warned that Wolfgang Schiuble wanted Greece to leave.

#Tsipras: In march or april #Varoufakis told me Schaeuble said "agree or consensual grexit", "contacted merkel, she said it wasn't her plan"

8.51pm BST

On the issue of Grexit, Tsipras says Greece simply isn't in a position to handle a return to the drachma. Not only would the banks collapse, but it would cause 'huge problems' elsewhere.

Tsipras: Country does not have sufficient currency reserves to return to a national currency #Greece pic.twitter.com/kGoC67wQGU

8.38pm BST

8.36pm BST

Interesting....Tsipras says he won't claim the deal is a success, but it is the only one on offer:

.@tsipras_eu I went to Russia China and U.S. and there were no other options.

8.35pm BST

Asked about suggestions Sunday's deal was an attempted coup, Tsipras says there are some elements - in Greece and abroad - who would like his government to fall.

He singles out the European People's Party - the home of Angela Merkel's CDU party, Commission president Jean-Claude Juncker, Council president Donald Tusk, and Greece's New Democracy party (and many other conservative groups)

Greek PM @atsipras: I am sure that some hard conservative groups in Europe would be happy if our government was a parenthesis. #Greekment

8.28pm BST

I don't believe in the agreement, but I'll sign it anyway rather than walking away.....

Greek PM @tsipras: I am not going to escape and I will take the responsibility even by signing an agreement I don't believe in. #greekment

8.23pm BST

The Big NO in Greece's referendum 9 days ago didn't actually spare us from austerity, Tsipras admits:

#Tsipras "Prior actions didn't change after referendum. Must be honest about that. But we have longer funding period & debt relief" #Greece

8.17pm BST

More Tsipras.

He says that Greece "fought a battle" to protect wages and pensions from cuts.

8.13pm BST

.@tsipras_eu When you have higher VAT taxes, you collect less taxes but this was forced upon us. #supplysider pic.twitter.com/apAeuaIf1P

8.12pm BST

Tsipras is adamant that he's come back with a better deal.

He argues that Greece needs pension reforms - and that although VAT hikes will be regressive, the impact is balanced by other measures.

.@tsipras_eu We got a lower primary budget surplus requirement. pic.twitter.com/HUSgnWlJHx

#Tsipras on increasing retirement age to 67: We should have done it ourselves. It's not progressive to allow people retire early.

8.10pm BST

Tsipras is arguing that the yes/no referendum strengthened his hand, and meant Greece got a better than was on offer before - which covers all our medium-term financing needs.

We got an agreement with hard reforms but not the complete impasse of the 25th of June says the Greek pm @atsipras. #Greece #Greekment

8.09pm BST

The Greek PM @atsipras now on #ERT about the #Greekment pic.twitter.com/H45wSTOkRM

Alexis Tsipras's interview with ERT has begun, in his prime ministerial office.

.@tsipras_eu Yesterday was a bad night for Europe. The result was due to very strong pressure. pic.twitter.com/eJdC1DmSs7

7.56pm BST

While we wait to hear from Alexis Tsipras, here's some new polling data showing that a majority of Greeks wants parliament to approve the bailout agreement, and Tsipras to stay as PM.

Kapa Research poll for To Vima Who is to blame for tough measures? European leaders 48.7% Greek gov't 44.4% #Greece

Kapa Research poll for To Vima Should Parliament approve the Brussels agreement? Yes 70.1% No 25.3% #Greece

Kapa Research for To Vima If there is change to coalition, who should be PM? Tsipras 68.1% Another, widely accepted figure 22.6% #Greece

7.53pm BST

The Greek prime minister is due to begin giving an interview to state TV in around 10 minutes

6.47pm BST

Ahead of tomorrow's vote in the Greek parliament on the bailout agreement tortuously agreed over the weekend , the International Monetary Fund has said the country needs massively more debt relief than the eurozone has admitted.

The IMF has updated its debt sustainability analysis to reflect the damage wrecked on the Greek economy since capital controls were imposed more than two weeks ago.

"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date - and what has been proposed by the ESM."

Got copy of #IMF DSA update. To me, most interesting thing not lines on debt relief. Tone sends signal they want out of #Greece completely

6.16pm BST

President Obama has reportedly welcomed the Greek deal in telephone conversation with German chancellor Angela Merkel. The US of course has been concerned about the impact of financial chaos in the eurozone on its own economic growth prospects.

JUST NOW - @POTUS called Chancellor Angela Merkel Welcomed Monday's agreement between Greece and its creditors. (1)

@POTUS noted agreement is a positive step that could help to underpin a return to growth and debt stability in #Greece (2)

@POTUS said that further work will be required. (3) #Greece

6.09pm BST

Could there be trouble brewing even if the Greek parliament passes the legislation?

@SpiegelPeter Iinimal turnover.

@YanniKouts Still, creditors have specifically mentioned they're worried about govt slipping things into legislation w/o telling them.

5.43pm BST

Greek MPs will pass the bailout terms on Wednesday, according to advisory firm Teneo, but there is the risk Alexis Tsipras will be so weakened there will be a snap election.

Teneo Intelligence's latest on #GREECE: Prior actions will pass, but political turmoil is looming large pic.twitter.com/gfuGnnCqHs

5.11pm BST

The legislation on the bailout has been submitted to parliament, as required by the EU deal:

#Greece Bill on the bail out terms agreed on #EuroSummit submitted to MPs. #mnimonio3 per @enikos_gr

Final version of Greek gov's multi-bill with the pension & tax reforms agreed with creditors submitted to Parliament. Vote expected late Wed

5.09pm BST

Here are two Syriza MPs who it appears will vote against the bailout terms tomorrow:

#Syriza MPs @elsotiriou and @dkodelas will vote No. Both associated with Communist Organisation of Greece (@KOEgr), which has Maoist roots

IIITM IfII IIIII I1/4III1/4III^1I. IIIIII1/4II^1 III^1 I IIII IIIIII^1 II IIIII^1 IIII^1III III IIII1/4IIIII I"I(R)IIIfI III IIIIII IIIIIIII...,... http://t.co/DMGPb0llD0

4.49pm BST

In rather uncertain trading - hardly surprising given the circumstances - European markets have, in the main, ended the day in positive territory. But it was not a convincing move, as investors wait to see if the Greek deal agreed after marathon weekend meetings will actually stick. The final scores showed:

4.21pm BST

Cabinet Reshuffle Will Go Beyond The Two Ministers Who Didn't Support Bailout Greek Deal-Govt Official

4.17pm BST

#Greek Cabinet Reshuffle To Take Place After Wednesday's Parliamentary Vote On Bailout Measures - Govt Official

4.11pm BST

More on the possible Greek government changes:

Greek govt officials restating that Tsirpas will not resign and also that any cabinet reshuffle will not change the make-up of the coalition

4.07pm BST

Over in Athens the Greek government has just announced that embattled prime minister Alexis Tsipras will be giving an exclusive interview to ERT1 this evening at 10 PM local time. Helena Smith reports:

Tsipras has taken increasingly to personally explaining his government's policies and by extension, the twists and turns of the Greek crisis, on state-run television. This will be at least the fourth time in recent weeks that the leader has addressed Greeks. Despite everything, he still enjoys record popularity ratings - and his beleaguered government is clearly now keen to exploit that fact. Many Greeks have rallied around claims made by several leading members of the government today that a coup is in motion, aimed squarely, at regime change in Athens.

3.58pm BST

Here's our report on the IMF's call for a greater level of debt relief for Greece. Economics editor Larry Elliott writes:

The severe damage caused to the Greek economy by more than two weeks of bank closures and capital controls means the stricken eurozone country will require far more generous debt relief than is currently on offer from its single-currency partners, according to the International Monetary Fund.

A report by the Washington-based Fund leaked to the news agency Reuters shows that Greece's public debt is likely to peak at 200% of its national income within the next two years, with the risk that the actual outcome could be even worse.

3.49pm BST

EC commissioner Pierre Moscovici has admitted the deal agreed yesterday will be tough on Greece but said it was a good one because it opens a way out of the recent impasse and keeps the country in the eurozone.

Writing in a blog post he said:

This timetable is tight, but it is a necessary antidote to the mistrust that has developed between Athens and its eurozone partners...

The agreement also sets Athens on a path of extremely precise reforms, and includes safeguards to prevent the country from deviating from that path.

Some say the terms of the agreement are unacceptable for Greece, even describing them as a gun to the head. Some believe that they are too demanding for a country whose population has suffered greatly for five years, and whose economy entered into recession again this year. I understand that position. And I also care first and foremost about the Greek people. The future programme will have to strike a balance between economic necessity and political reality. If excessive mistrust led us to ask the impossible of Greece would be damaging for all. I hope we give Greece a chance to prove its good faith, and that the future programme allows the country to raise its head economically and politically.

Still, we lost six months. During which the situation in Greece has deeply deteriorated. The human, political and economic cost of the agreement increased dramatically. This makes me sad and leaves a bitter taste in my mouth. For it is the Greek people who, once again, will bear the costs.

3.45pm BST

Austria's parliament is reportedly set to vote on the Greek deal on Friday, the same day as Germany.

3.44pm BST

Peter Kazimir, the Slovak finance minister, ran into some controversy yesterday by tweeting that the compromise reached was tough for Athens because it was the result of their "Greece Spring."

That was subsequently deleted but Kazimir has waded in again just now, changing "Greek Spring" to "Syriza Spring."

There is a saying - tell someone the truth, lend him/her money and they will become your enemies

The Greek compromise, reached on Monday, is considered to be tough and harsh. If it's so, it is the unfortunate outcome of Syriza Spring'

In tense situations, some tweets can trigger anger. Our intention to be straightforward about our perspective, not to insult or offend

3.39pm BST

The European Commission is downplaying the latest IMF report, writes Jennifer Rankin in Brussels.

A Commission spokeswoman said she had not seen it. She added that the IMF and the Commission had together signed off on an economic assessment that put Greece's funding needs at a74-a78bn from 2015-18. This was the document sent to finance ministers on Saturday and formed the basis for the bailout agreement that emerged on Monday morning. She said: "This is the document that is relevant for a possible ESM programme," a bailout under the European Stability Mechanism fund.

3.39pm BST

Tyrie: "Arguably it's the IMF that also needs some reinforcement. The IMF has got itself into a bit of a pickle, hasn't it? It's heavily exposed. Is it going to get its money back? Are you looking at that issue and the vulnerability of the IMF itself?"

Carney: "I think it is important to recognise the preferred creditor status of the IMF and that any contemplated extension adjustment to the debt of Greece should respect that. I agree, as a personal view, that it's important that the IMF in any situation is an independent institution providing objective advice and making appropriate lending decisions in that context."

3.24pm BST

Tyrie: "Has the Bank been giving thought as to whether the IMF should have got itself so close to this whole issue rather than giving independent advice to its quota members?"

Carney: "The UK representative at the IMF is appointed by the Treasury not the Bank. We worked with - in recent days, weeks, months - with the IMF to offer independent perspective on some of these issues, potential solutions to these issues in an effort to be helpful. The Fund is dealing with an extremely fluid situation obviously in Greece and I'll just reiterate that there is no simple solution as you can appreciate... There will need to be debt relief in our view... but debt relief in and of itself will not be sufficient to the other elements of structural reform and fiscal adjustment that are going to be required as will a measure of privatisation be required ultimately.

3.11pm BST

Bank of England governor Mark Carney has been continuing his evidence to parliament's Treasury select committee, where the committee's chair Andre Tyrie has just asked him about that IMF paper on the need for much bigger debt relief for Greece.

Here is the exchange, which alludes to Carney's comments earlier this morning to the committee that working through the euro summit agreement requires "Herculean efforts from all sides".

2.58pm BST

Angela Merkel and her finance minister, Wolfgang Schiuble, have come under sharp attack at home for their handling of the Greek crisis talks, with some opposition politicians accusing them of blackmailing Athens.

Ahead of a special session of the Bundestag on Friday at which Merkel, the German chancellor, will ask parliamentarians to support negotiations for a third bailout for Greece, some MPs accused her and Schiuble of deliberately trying to split Europe.

2.43pm BST

Speaking of France... Marine Le Pen has kept up her barrage of criticism of the Greek deal, which she says will have "heavy consequences" on French taxpayers and the the country's debt.

She accused the European Union of "totalitarian" behaviour, in a statement released by the Front National, adding:

"It's clear he [Hollande] wasn't guided by national interest, making this terrible declaration on the day of this national holiday, that the interests of the French people come after "European interests"."

2.38pm BST

Franiois Hollande has used his traditional Bastille Day interview to insist that Greece was not "humiliated" by the EU bailout deal and that the most important thing for the Greeks and for Europe was that the country remained inside the eurozone.

"Without the Franco-German couple it was not possible to find an agreement. When Germany and France are not united, Europe cannot go forward."

"I told him: help me to help you,"

"This is what we, along with Germany, want,"

2.36pm BST

The eurozone leaders knew of the IMF's debt analysis before agreeing the third bailout terms for Greece, an EU source has told Reuters.

2.31pm BST

More from the IMF. Deputy managing director Zhu Min added to the fund's calls for debt relief for Greece. Bloomberg reports:

Greece needs debt relief to aid the economy after agreeing to a range of austerity measures in exchange for a bailout, said Zhu Min, deputy managing director of the International Monetary Fund.

"The financing is clearly a very important issue for the Greek economy and the debt relief is also an important issue," Zhu said in an interview on Tuesday in Ethiopia's capital, Addis Ababa, where he is attending a development finance conference. "Given the debt ratio is way high, something we need to think of is a proper way to do the debt relief profile and debt restructuring to reduce the burdens and help the economy move forward."

2.26pm BST

Look who's talking (again).

Former Greek finance minister Yanis Varoufakis has blogged his views on the bailout deal which Alexis Tsipras reluctantly signed up for on Monday morning.

Never before has the European Union made a decision that undermines so fundamentally the project of European Integration. Europe's leaders, in treating Alexis Tsipras and our government the way they did, dealt a decisive blow against the European project.

The project of European integration has, indeed, been fatally wounded over the past few days. And as Paul Krugman rightly says, whatever you think of Syriza, or Greece, it wasn't the Greeks or Syriza who killed off the dream of a democratic, united Europe....

The crucial question is: Does the Greek economy stand any chance of recovery under these terms?

Varoufakis on bailout deal: Fire Brigade not using enough water on the fire I started. http://t.co/0D7fKTpLT1 (ht @OwenCallan )

2.14pm BST

Using the EFSM to fund the Greek bridging loan would cause the most almighty row in Europe, and not just with Britain.

Sweden and Denmark also opposed using the EU-wide fund to finance Greece, apparently:

Spanish FinMin Luis de Guindos says UK, Sweden and Denmark "have expressed reservations" on use of EFSM for bridge financing. #Greece

1.57pm BST

Developments in Brussels...... Reuters is snapping that the Commission is going to ignore George Osborne's concerns, and recommend tapping the EFSM to fund Greece's bridge financing.

EC to recommend use of EFSM for Greece bridge financing, despite objections from UK and Czechs

1.36pm BST

The IMF's leaked report is potentially dynamite, because the Fund cannot lend to a country if it doesn't believe it would be sustainable.

So unless Europe swallows the reality that Greece needs major debt relief, the IMF won't provide any more bailout funds.

As Greek parties agonise over Summit Deal, IMF debt sustainability update spells out: it cannot work without partial debt write-off

Looks like #IMF is really pessimistic on #Greece debt sustainability. Its either annual transfers to GR budget or haircut to make it work.

Shorter IMF, on Greece: "No deal"

1.30pm BST

This secret IMF report also warns that Greece's national debt could soon hit 200% of GDP, even further into unsustainable levels.

1.14pm BST

Breaking away from Brussels.... a leaked International Monetary Fund report has shown that Greece needs massively more debt relief than the eurozone has admitted.

The IMF has updated its debt sustainability analysis to reflect the damage wrecked on the Greek economy since capital controls were imposed more than two weeks ago.

IMF finally says what they think about Greece http://t.co/JWH2Mj9Nrm (via @ForexLive) pic.twitter.com/NnshywvgG8

12.56pm BST

Eurogroup officials are still looking at solutions to find bridge funding for Greece, says vice-president Dombrovskis.

"Concerns were raised by several non-euro states. We need to take that into account."

At post-FinMin meeting presser, @VDombrovskis confirms use of #EU-wide EFSM still on table as possible source of #Greece bridge financing

12.49pm BST

Recent developments in Greece shows the need to strengthen European monetary union, EC vice-president Valdis Dombrovskis tells the Ecofin press conference.

And the muted market reaction to the crisis shows that progress has been made in creating crisis-fighting tools and avoiding contagion, he adds.

Dombrovskis: Recent experience has shown us that respect of commonly agreed rules is of paramount importance. #Greece

12.47pm BST

Schiuble has also outlined how Alexis Tsipras should blame himself for the way things worked out:

Schiuble: Despite election campaign filled with wild promises - no savings, no reforms, no troika, Greece was confronted with reality

12.42pm BST

Schiuble: I don't know if EU budget could be used to provide bridge funding to Greece, I'm not an expert in EU law

I'm not sure the UK would support using the EU budget to fund Greece either; it still puts money from non-eurozone members at stake (but what price European unity, George?)

12.38pm BST

Wolfgang Schiuble appears to have agreed with George Osborne, that the EFSM fund should not be used to find a loan to Greece.

#Schauble: risk for bridge financing should lie in Greece. If not: moral hazard a' maybe EU-budget, but not EFSM.

12.35pm BST

European finance ministers have exited ECOFIN and are chatting to the press.

Germany's Wolfgang Schiuble doesn't sound too optimistic of finding a bridge loan for Athens (to cover repayments to the ECB in July and August)

Schiuble: Finding a temporary financing solution for Greece will be tough, this is what will occupy our attention over the next few days

Guindos: "No doubt" there'll be agreement on bridge financing, otherwise it makes no sense not to meet first condition aftr Sunday's deal

12.33pm BST

One solution to Greece's bridging loan problem would be for another country to make a bilateral loan.

So who's going to embrace European unity and dip into their pockets?

@dannyctkemp @SpiegelPeter being told France would not go it alone and give Greece loan money...needs others to chip in...

12.26pm BST

Greece's economy minister George Stathakis, has predicted that Alexis Tsipras will reshuffle his cabinet tomorrow night, after the bailout vote.

Interviewed on Bloomberg, Stathakis added that he couldn't rule out changes today, though.

Stathakis says Capital Controls will probably last a couple of months.

"There is no way a bail-in will ever take place"

12.10pm BST

Heads-up.... the ECOFIN press conference is about to start.

Could there be developments on the Greek bridging loan?.......

Press conference #ECOFIN Council starting soon. Watch live: http://t.co/tvzwmx9yKc. #EuropeanSemester #EU2015LU

11.47am BST

Back in Athens, there's a rumour that the secretary of Syriza's central committee, Tassos Koronakis, isn't at all happy about the bailout deal.

Syriza party secretary Koronakis said to be opposing bailout #agreekment. #Greece

11.23am BST

#greece ordered to do reforms never done in italy, france. sunday trading? in germany? in austria? over-counter chemists? anywhere non-uk?

11.21am BST

Traders are betting that Greece will remain in the euro until at least the start of next year, even though the deal isn't in the bag yet.

Punters See #Grexit Probability Slide to 9% From 50% http://t.co/3u2yhQufoj via @NateLanxon #Greece pic.twitter.com/7MZRw2zC0N

11.12am BST

Here's a handy breakdown of the Greek bailout plan:

Third bailout for #Greece. @FinancialTimes pic.twitter.com/TRPe1AB28r

11.07am BST

Mark Carney isn't alone in worrying that the Greek deal is hard to pull off.

Eric Lascelles, chief economist at RBC Global Asset Management, says there is "ample room for error", as Alexis Tsipras tries to drive through labour market reforms, pension cuts, VAT tax increases, privatizations, higher corporate taxes, a military spending cut and additional IMF involvement in Greece.

In exchange, Greece is set to receive an a86bn euro bailout package that should in theory return the country and its banks to liquidity and solvency. Debt relief will apparently be put on the table for discussion once Greek is demonstrably compliant with the initial conditions.

This development has sharply reduced the risk of a Greek Eurozone exit by a significant margin, but that risk has not vanished altogether (we put it at around 35%, down from 60% over the next year).

10.47am BST

Mark Carney's deputy, Jon Cunliffe, says the eurozone is under "a lot of strain".

He cites the German suggestion that Greece could get a "time out" from the euro.

BoE deputy governor Cunliffe: "The political will to hold the euro together has been pretty tested by this" #Greece

BoE dep gov Cunliffe: msg from weekend was "there is still an awful lot of political capital invested in the euro and will to keep it whole"

10.45am BST

Bank of England governor Mark Carney has just warned MPs that it will be very hard to implement the Greek bailout deal.

10.20am BST

A nice summary of Athens' stance today:

Govt's 2 lines of argument: They wanted to kick us out of euro so we're staying in & they wanted a coup so we're not going anywhere #Greece

10.10am BST

Here's George Osborne making his views known to Alex Stubb and Jeroen Dijsselbloem:

10.00am BST

The UK chancellor is now kicking off in Brussels, over the idea that the short-term loans Greece desperately needs could be partly funded with British cash.

Told that inside #EU finmins meeting, @George_Osborne "furious" at suggestion EU-wide EFSM may be used for #Greece bridge financing

9.47am BST

The right-wing Independent Greeks party, the government's junior partner, has just offered Tsipras some support over the hugely controversial deal he brought back from Brussels.

Panos Kammenos, the party's leader, has just declared that:

"We will stand by Alexis Tsipras government."

"It is clear to all of Europe that yesterday night a coup happened in the heart of Europe.

The PM was blackmailed into signing a very different agreement. And this coup is continuing here in Greece where people want the government to fall."

#now @PanosKammenos (ANEL) "Special purpose national government is what is wanted by the Coup masterminds" #Greece

9.30am BST

Over in Athens governing Syriza party sources are not ruling out a reshuffle taking place as early as today, following Tsipras's meeting with his party.

"The preference would be for a reshuffle after the vote but nothing can now be ruled out."

"Social counter-measures must be found which will give hope to people."

9.22am BST

Britain won't contribute any money to the Greek bailout, declared UK chancellor George Osborne as he arrived at today's meeting of EU finance ministers in Brussels.

Britain is not in the euro, so the idea that British taxpayers will be on the line for this Greek deal is a complete non-starter.

The eurozone needs to foot its own bill.

9.12am BST

Finland's finance minister Alex Stubb agrees that bridge financing is a problem, as eurozone countries can't just hand over funds to Greece without 'conditionality'

But it is probably impossible to back down at this stage, so some kind of agreement will be found, Stubb replies. Perhaps bilateral loans to Greece?

9.10am BST

Europe is battling to find a way to provide 'bridge financing' to help Greece meet its short-term funding demands, while a third bailout is agreed.

Arriving at today's ECOFIN meeting, Eurogroup president Jeroen Dijsselbloem said officials are still working on a way to help Athens meet its repayments to ECB this summer, starting on July 20.

They all seem to have disadvantages or impossibilities or legal objections, so we're still working on it.

9.06am BST

Syriza parliamentary group spokesman Nikos Filis has urged MPs to support Tsipras -- warning that they would otherwise be allying with Greece's enemies in Brussels.

He told reporters:

"Wasn't what happened in Brussels a coup? What happened? Didn't they say, either this deal or we take Greeks' deposits and the banks go bankrupt? The government came under threat from economic and political forces that do not forgive the Greek people for making a different choice.

I think that, often, we facilitate these plans. We cannot end with a left interregnum with the complicity of people of the left."

8.56am BST

Finland's finance minister tweets that he's still hopeful of a happy ending to the crisis:

After the @epp meeting time for a short #Ecofin. It's been a tough few weeks, but I remain optimistic that solutions will be found.

8.40am BST

European stock markets are lacklustre in early trading.

Fresh from his mental 'crucifixion' at the EU summit, Alexis Tsipras has another few tortuous days ahead of him as he tries to stem a growing left-wing rebellion in his own party, all in order to pass legislation by Wednesday that will go some way to unlocking a third bailout.

Some are already speculating that inter-party issues over the weekend's Greek deal could lead to a much-touted, and no doubt Germany pleasing, Tsipras resignation.

8.32am BST

UK chancellor George Osborne is expected to fight efforts to make Britain contribute to the Greek bailout, at today's ECOFIN meeting of finance ministers.

The British government isn't impressed that the European Financial Stabilisation Mechanism (EFSM) would underwrite the deal. That would break an agreement that the EFSM (funded by all 28 EU members) wouldn't fund eurozone bailouts again.

8.15am BST

In a fresh sign of political turmoil in Athens, an influential Greek minister has demanded that Alexis Tsipras withdraws the bailout deal agreed in Brussels.

"Our so-called partners led by the German establishment, behaved towards our country as being their colony and they are nothing more than brutal blackmailers and financial assassins."

#Greece EnergyMin Lafazanis says govt should take back agreement with creditors

7.55am BST

Syriza's own parliamentary spokesman has described the deal forced on Greece at the Euro Summit as a "coup", according to Reuters:

#Greece #Syriza parliamentary spokesman: Lawmakers will not overthrow mandate given by voters in Jan; There was a "coup" in #Brussels 1/2

#Greece #Syriza parliamentary spokesman: Most important thing is to give response to "coup"; Govt of the left must not fall #EuroSummit

7.50am BST

Good morning, and welcome to our rolling coverage of Greece's financial crisis.

syriza political cttee meets at 9am as tsipras's biggest battle starts with opposition w/in the party. #GreekCrisis

Growing rumours that #Tsipras may resign this morning along with the whole SYRIZA party. Technocrat gov to come in. #GreeceCrisis

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