Belfast Telegraph

Chancellor hails Greek deal as 'good for Britain'

By Geoff Meade

The Greek bailout is "good for Britain", Chancellor George Osborne insisted yesterday as he hailed the deal as a "really significant step" towards resolving the eurozone crisis.

Single currency governments approved a second massive rescue package for the ailing nation after more than 12 hours of talks in Brussels.

Haggling over figures, financial targets and Greek government belt-tightening pledges went on through the night in a last-ditch attempt to rally markets and put crisis-hit Athens back on the path to economic recovery.

Speaking to reporters as he arrived for an EU finance ministers' meeting in Brussels, Mr Osborne said: "Of course, resolving the Greek situation is only part of resolving the eurozone crisis but I think we took a really significant step towards that last night and that is good for Britain because resolving the eurozone crisis would be the biggest boost that Britain could get for its economy this year."

The Chancellor said the package was a major step towards securing debt sustainability in Greece.

"That's been the crucial missing ingredient," he added. "They have not, in the past, come up with a sustainable position for Greece. I think they have made real progress now towards giving a sustainable debt position for Greece.

"Of course the Greek people, the political system has to deliver really difficult decisions now but I don't think Greece has any other option.

"The other significant point about last night's deal was that the rest of the eurozone signalled a willingness to stand behind their currency and stand behind Greece and frankly all along the failure to deal with the Greek situation has caused uncertainty.

"Hopefully we can all move on now and get the European economy growing."

In return for the latest €130bn (£110bn) bailout and a private creditor debt write-off worth about another €100bn (£84bn), the Greek government is pledged to implement fully a severe austerity package of pay, pension and jobs cuts, as well as finding savings of €325m (£270m) in this year's national budget.

Greece received a €110bn (£91bn) bailout in 2010 but it was not enough to lift it out of crisis.

Ahead of the overnight talks some critics were warning against "throwing good money after bad", but the price of letting Greece default and be forced out of the euro currency was seen as a worse option.

Instead the talks concentrated on tying Greece as tightly as possible to austerity measures which will chip away at its debt and deficit levels.

Political parties on all sides were even pressed to promise no easing of the austerity package in forthcoming Greek elections.

A deal was needed to give Greece enough funding to meet its next debt repayment of €14.5bn (£12bn), due on March 20.

But beleaguered Greek prime minister Lucas Papademos has faced violent protests for months as he has tried to impose the deep public sector cuts demanded by the EU and IMF in return for another enormous bailout.

And his troubles are far from over: Greece has been in recession for five years and the latest deal cannot guarantee much more than temporary relief, unless the cutbacks work.