Greece has to go through a laundry list of actions and commit with concrete steps to reforms before sealing a new bailout of as much as 86 billion euros ($96 billion) that will keep the country in the euro.

The role of the International Monetary Fund and Germany’s demand for an independent asset sales fund came close to becoming deal-breakers before an agreement was reached between the country and its creditors after almost 17 hours of talks. The IMF’s continued role was assured in any future loans to Greece.

Greece must now take a series of steps to rebuild trust with its European partners and creditors after six months of talks brought the country to the brink of a euro exit:

Next Steps

* Euro-area finance ministers will hold a scheduled meeting later Monday in which they’re expected to look into bridge financing options that will keep Greece and its banks afloat while a longer-term loan agreement is negotiated. Greece’s urgent financing needs are estimated at 7 billion euros by July 20, including a payment of 3.5 billion euros to the European Central Bank due July 20, and another 5 billion euros by mid-August according to statement issued by euro area leaders.

* The European Central Bank will also discuss whether to maintain or extend emergency funding for Greek banks, which remain closed for the third week.

* Greece’s parliament has until Wednesday to approve an initial set of reforms, including tax and pension reforms. A second set of reforms, including additional measures taking into account the economy’s deterioration and the establishment of a 50-billion-euro asset fund, will have to be legislated on by July 22.

David Fuller's view

Predictably, the clear short-term victors in this EU / Greece agreement are global stock markets, as we have seen over the last three market days.  The uncertainty and threat of ‘Grexit’ appears to have ended.  If so, the risk of contagion and collateral damage affecting other countries has been avoided.  Concerns over economic and political developments within the EU have subsided for the time being. 

Unfortunately, the European Union’s ‘victory’ in keeping Greece within the EU has come at a high price.  Negotiations between Greece and the Troika over the last six months are the most acrimonious in the EU’s history.  The leftwing Syriza Party did not win any friends in Germany by demanding €341bn in war reparations last March.  Germany gained sympathy and admiration by showing considerable restraint at the time. However, following tough negotiations over the weekend, many commentators now feel that Greece has been blackmailed, humiliated and further impoverished by the EU, with Angela Merkel and Wolfgang Schaeuble being the chief protagonists. 

In a rhetorical question: How many Swiss citizens would vote to join the EU today?  Here is another one: Will Greece’s humiliation ensure an ‘Out’ vote in the UK’s referendum scheduled before the end of 2017?  

On a lighter note, the EU is like the song “Hotel California”, mentioned to me by Eoin.  Here are the last two stanzas:

Mirrors on the ceiling,
The pink champagne on ice
And she said "We are all just prisoners here, of our own device"
And in the master's chambers,
They gathered for the feast
They stab it with their steely knives,
But they just can't kill the beast

Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
"Relax, " said the night man,
"We are programmed to receive.
You can check-out any time you like,
But you can never leave! "

Other Southern European nations will not be reassured on seeing Greece turned into a vassal state.

(See also: Europe’s Insane Deal With Greece)