Greek PM says secured debt restructuring, Merkel warns of 'long road ahead'

A file photograph showing Greek Prime Minister Alexis Tsipras at the European Council headquarters in Brussels. Mr Tsipras said the new deal could bring new investment to help the country pull itself out of recession. PHOTO: EPA
A file photograph showing Greek Prime Minister Alexis Tsipras at the European Council headquarters in Brussels. Mr Tsipras said the new deal could bring new investment to help the country pull itself out of recession. PHOTO: EPA

BRUSSELS (REUTERS) - Greece has secured debt restructuring and medium-term financing in a growth package worth 35 billion euros in a deal with its creditors that will allow the country to stay in the euro, Prime Minister Alexis Tsipras said in Brussels on Monday.

He said the deal could bring new investment to help the country pull itself out of recession and avoid the collapse of its banking system.

"The deal is difficult but we averted the pursuit to move state assets abroad. We averted the plan for a financial strangulation and for the collapse of the banking system," Mr Tsipras told reporters after all night talks. "In this tough battle, we managed to win a debt restructuring," he said.

Euro zone leaders clinched a deal with Greece on Monday to negotiate a third bailout to keep the near-bankrupt country in the euro zone after a whole night of haggling at an emergency summit.

Meanwhile, German Chancellor Angela Merkel warned on Monday that Greece and its European partners still faced a challenging road ahead to finalise a third bailout for Athens, after marathon talks ended with a deal.

"The road will be long, and judging by the negotiations tonight, difficult," Ms Merkel told reporters.

She said she would recommend "with full conviction" to parliament to authorise the opening of negotiations with Greece on a third bailout once the Greek parliament approves the whole programme and enacts initial laws.

Ms Merkel would not say when that would happen but said she would give a positive report to a parliamentary committee this week.

It was better not to recall lawmakers from the summer recess until they were sure the Greek laws had been passed, she said.

After an all-night negotiation pitting her against leftist Mr Tsipras, the conservative chancellor said Greece had made conditions worse for itself through the sharp deterioration of its economy in the last six months, and the closure of its banks for the last two weeks.

She acknowledged that Germany had dropped a demand that the agreed summit document state explicitly that Greece should have to take a "time out" from the euro zone if it did not meet the conditions for the bailout. "We don't need a Plan B because the Plan A was approved,"she said.