Eurozone finance ministers and the International Monetary Fund have tried twice to establish a long-term plan for Greece. Now it is ready - but it may be too ambitious.
This agreement took three attempts and many night shifts. But unlike last week's failed meeting, the rings around everyone's eyes weren't quite as dark - and the relief was even greater. Eurogroup leader Jean-Claude Juncker said at a press conference afterwards, the new deal was about more than money - it was the "promise of a better future for the Greek people and the entire eurozone."
EU Monetary Affairs Commissioner Olli Rehn added that the bloc had passed a credibility test, "that we simply could not fail."
No debt cut
To ease Greece's debt burden, the euro states agreed to lower interest rates, extend deadlines, and pass on profits from Greek bonds to Greece. But a call from International Monetary Fund head Christine Lagarde for debt relief from public creditors - a so-called haircut - was resisted, particularly by Germany.
Finance Minister Wolfgang Schäuble almost indignantly ruled this out on his arrival in Brussels; after all, he argued, the eurozone was already providing guarantees to Greece. "You can't guarantee something if you're also cutting debt at the same time," he said, adding that it was a "bad habit" of the media to present this as a typically German problem. "It's the same for all the eurozone member states," he said,
Despite not getting what she had hoped for, Lagarde came out of the meeting satisfied. She said the main thing for the IMF was achieving a sustainable level of debt, and that the "euro partners had to do what was necessary." This, she said, was achieved.
Ambitious debt reduction plan
With this relief to Greece's debt burden, tied to further Greek reform promises, the donor countries expect the debt level to reach a peak in 2016, and then fall to 124 percent of gross domestic product by 2020, and then "significantly" less than 110 percent by 2022.
Analysts consider 120 percent just about sustainable, but that is still twice as high as what was set as the upper limit by Europe's stability pact and the original Maastricht Treaty. But the massive reduction of the debt level - particularly the huge fall in the two years from 2020 to 2022 - is considered both extremely ambitious and difficult to predict, considering the long-term time plans being made.
The future of Greece's economy, which has deteriorated sharply in the past few years, seems impossible to predict over more than ten years. The fact that the finance ministers do not necessarily trust their own forecasts was evident in remarks by Schäuble. "If necessary, we will discuss further measures for the reduction of the total debt," he said.
Critics say that the taxpayer will probably have to take a debt cut at some point, though Schäuble is hoping that that will only happen after next September's German election.
Praise for Greece
The ministers, at least, were full of praise for Greece's attempts at reforms and budget cuts. Austrian Finance Minister Maria Fekter, who used to regularly hurl venomous barbs at the country, acknowledged that Greece had "worked very hard - we really can't complain about Greece at the moment."
But she did betray some suspicion. "There will have to be accompanying checks - both in terms of the payments and the structure of reforms," she said. Schäuble said he could take this deal to the German parliament in good conscience. The Bundestag, as well as other European parliaments, must still approve the deal. The latest tranche from the ongoing bailout package for Greece could then be released in mid-December.