Greek Prime Minister says his country will no longer be "asphyxiated" but still faces difficulties after agreeing last-ditch bail-out extension
In his address to the Greek people, Prime Minister Alexis Tsipras stressed that yesterday’s Eurogroup agreement with the country’s European loan partners was an “important success,” signaling the end of austerity and the bailout program. Although, as he underlined, the difficult part of the negotiations still lies ahead.
The Greek government has won a battle against its austerity programme and the Troika after reaching a deadline-day extension to avert bankruptcy, according to the country's prime minister.
Speaking in a televised address, a defiant Alexis Tsipras said: "Yesterday we took a decisive step, leaving austerity, the bailouts and the troika."
"We won a battle, not the war. The difficulties, the real difficulties ...are ahead of us."
Greece secured a temporary four-month extension of its bail-out with Eurozone finance ministers on Friday evening.
Yanis Varoufakis, Greece's finance minister said the agreement had "averted a sickness" in the Greek economy, by allowing a relaxation of tough fiscal targets that had previously been imposed on the economy.
"We are no longer following a script given to us by external agencies. Once you have a relationship of equals, the co-operation can be a lot more fruitful," said Mr Varoufakis.
Greece now faces a race to come up with the list of reforms it will carry out in return for money from the "institutions" of the European Commission, European Central Bank and the International Monetary Fund.
The Prime Minister met with his inner cabinet of 10 ministers on Saturday today to discuss the proposals to be submitted before Monday's deadline. If the reforms are deemed sufficient by Greece's partners, the bail-out extension could be ratified by the German parliament next week.
Pressure to negotiate a deal before the February 28 expiry date heightened as it was revealed that almost €1bn a day was being withdrawn from Greek banks.
Mr Tsipras added the extension would finally put an end to the "asphyxiation" Greece has suffered since 2012.
"Yesterday's agreement with the Euro group cancels the commitments of the previous government for cuts to wages and pensions, for firings in the public sector, for VAT rises on food, medicine," added the prime minister.
"We averted plans by blind conservative powers, within and outside the country, to asphyxiate Greece on February 28," he said.
Yields on Greek debt fell in anticipation of a deal being struck. The country's 10-year bonds fell below 10pc for the first time in a week.
Both Greece and its creditor countries were claiming a victory in the negotiations late on Friday night.
Germany's finance minister Wolfgang Schaeuble, who had rejected an earlier Greek agreement on Thursday, said the deal was a reality check for the new Leftist government in Athens.
"Being in government is a date with reality, and reality is often not as nice as a dream," said Mr Schaeuble, stressing Athens would get no aid payments until its bail-out programme was properly completed.
"The Greeks certainly will have a difficult time to explain the deal to their voters," added the finance minister.
The deal will expire in June, requiring another set of negotiations for a longer-term agreement as Greece faces a series of loan repayments to its creditors in the summer.
"We won time. Neither the Greek economy nor the Greek government were strangled,” Syriza government spokesman Gabriel Sakellaridis said on Saturday.