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Bailout a bad deal but the best Greece could get

The Greek prime minister, Alexis Tsipras, has defended the bailout agreed at Sunday’s eurozone summit and ruled out resigning, saying it was a bad deal but the best available under the circumstances.

“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,” Tsipras told Greek public television on Tuesday.

In an hour-long interview that mixed a defence of his abrupt change of course over the bailout deal with barbs aimed at Greece’s European partners, Tsipras said he had fought a battle not to cut wages and pensions.

He said Greece must stick to the deficit reductions agreed in the deal, which he said were milder than previously agreed cuts.

Tsipras said that even though some countries had resisted giving Greece “fresh money” – Finland and the Netherlands in particular – they relented in the end.

“To be frank, they are not only forced to give fresh money, but to give €82bn [£58bn], and are accepting the restructure of debt.”

The prime minister faces strong discontent within his Syriza party over the deal. But he said he intended to serve a full four-year term, ruling out early elections. “The worst thing a captain can do while he is steering a ship during a storm, as difficult as it is, is to abandon the helm,” he said.

Asked when Greece’s banks would reopen, after closing more than two weeks ago when capital controls were imposed, he said: “When banks open depends on when we have the final ratification of the agreement.”

The European Central Bank, which set a cap on emergency liquidity to Greek banks, would gradually increase it, allowing a relaxation of capital controls, he said. “It won’t be from one day to the next. There will be a gradual return to normality, starting with an increase in the withdrawals.”

One of the provisions of the agreement with creditors is setting aside €25bn for the recapitalisation of the country’s banks.

Tsipras said he did not believe the banks required the entire amount. “Twenty-five billion is more than enough. I believe banks will need €10bn-15bn.”

Having staved off financial meltdown, Tsipras has until Wednesday night to pass through parliament measures that are tougher than those Greek voters rejected in the referendum on 5 July. With mutiny among hardliners in his own ranks, Tsipras will probably need the support of pro-European opposition parties to carry the vote.

“The hard truth is this one-way street for Greece was imposed on us,” Tsipras said. The lenders had sent the message that in a country under a bailout there was no point in holding elections, he said.

But he insisted that things would have been worse had there been no deal. “A disorderly default would not only have led to a collapse of the banking system and a disappearance of all deposits, but it would force you to print a currency which would be drastically devalued because there is no reserve to support it,” he said. “A pensioner who got €800 would get 800 drachmas and it would only last him three days and not a month.”

He said he would do all he could to maintain the unity of Syriza, but his priority was to secure a deal and the stability of the economy and banking system before dealing with party matters.

Asked if he would expel rebel MPs if they voted against the bailout deal, he said expulsions were not part of his party’s culture.

Source: The Guardian

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