Friday’s 11th-hour agreement will prevent Greece from having to abandon the eurozone. But it is also likely to be politically costly for the country’s newly elected anti-austerity government.
Greek Prime Minister Alex Tsipras warned Saturday that his country faces a “long and difficult road ahead,” despite reaching a deal on Friday with Eurozone creditors.
Under the agreement struck by finance ministers in Brussels, Greece will receive four months of relief from the $272 billion bailout it has needed to stay afloat since the financial crisis of 2008.
Tsipras’ leftist government, which came to power last month, has until Monday to prepare a list of economic reforms it will undertake. That forced walk-down from electoral promises to put an end to austerity measures will likely put Tsipras in a politically tough spot with supporters.
“We won a battle, not the war,” Tspiras said during a televised address Saturday translated by the BBC.
The agreement still needs to be ratified by the parliaments of the creditors, but it ended concerns that Greece might be forced to abandon the euro on Feb. 28, when the bailout was originally set to expire.
The Greek leader hailed the agreement as a “decisive step,” but warned Greeks they have a “long and difficult road ahead.”
Greece has been mired in a huge economic crisis for the past five years, with its economy shrinking by almost a third. Its government has needed large loans from other nations in the eurozone — particularly Germany — just to stay afloat.
But those loans have come with strings attached that have proven unpopular among Greeks. The European Commission, the European Central Bank, and the International Monetary Fund, collectively know as the troika, have demanded that Greece implement austerity measures in exchange for the loans.
The measures have included mass layoffs of government employees and a significant reduction in public services.