2nd LD Writethru: Eurozone summit reaches bailout deal on Greece

The eurozone summit finally reached a bailout agreement with Greece on Monday morning after 17 hours of tough discussions, eurozone leaders announced.

"Today we had only one objective, to reach an agreement. And after 17 hours, we have it, we will continue to support Greece," European Council President Donald Tusk told a press conference, shortly after the eurozone leaders passed the bailout deal for Greece to avert the debt-ridden country's bankruptcy and exit from the eurozone.

The agreement still needs the approval of several national parliaments, including the Greek parliament, Tusk said, adding that the European Council will formally implement the European Stability Mechanism (ESM) program in Greece.

"There is no Grexit," European Commission President Jean-Claude Juncker said at the same press conference, confirming that the Greek proposals for support have been accepted.

"There are no winners and no losers. It is a compromise, a typical European arrangement," Juncker said.

Meanwhile, Eurogroup President Jeroen Dijsselbloem said the Greek parliament must immediately start passing legislation to implement the measures agreed upon in Brussels.

"If Athens does that on Tuesday and Wednesday, then the Eurogroup can take a view on Wednesday. And then national parliaments can give their own approval for a third bailout. Then firm negotiations can take place over a new bailout from the ESM," Dijsselbloem said.

Regarding the Greece's finance needs, Dijsselbloem said a fund will be set up using privatizing Greek assets or running that asset to make money.

The eurozone summit statement said this fund would be established in Greece and be managed by the Greek authorities under the supervision of the relevant European institutions.

"The money will be used to deal with debts to reduce debts, also it will be used for the repayment or recaplisation of banks," he said.

Dijsselbloem said one of the big issues once the program is agreed, is the problem of the banks so the fund will also contribute to the repayment of those capitalisation needs.

"In addition, once the 25 billion euros (about 28 billion U.S. dollars) needed for recapitalisation is repaid, 50 percent of the remainder will be used for debt reduction, and 50 percent for investment in Greece, so that to work on both debt sustainability and to let Greece return to growth," he explained.

German Chancellor Angela Merkel said after the summit in a national briefing that the eurogroup is ready to consider extending the maturity on Greek loans, but a "nominal haircut" is out of the question.

Merkel said she can recommend "with full conviction" that the Bundestag should agree to open negotiations with Greece. But the Greek parliament must approve the entire conditions before the German parliament votes.

She confirmed that a 50-billion-euro fund will be created using Greece' privatising assets. "It will be a long and difficult road," she added.

She also underlined that apart from the trust fund, it's also important to strengthen the government by modernisation of the administration. (1 euro = 1.11 U.S. dollars) Endit