Flash Notes:Greece,Deal!

After non-stop grueling negotiations all weekend, Eurozone leaders have finally agreed to provide Greece with a new bailoutloan from the European Stability Mechanism (ESM). However, the deal still needs to be approved by the Greek parliamentfirst, before going to other national parliaments for approval. The following are comments from the Eurozone leaders andothers who attended a near 17 hour meeting in Brussels on Sunday:

    Eurogroup President Jeroen Dijsselbloem says that the Greek parliament must immediately start passing legislationto implement the measures agreed in Brussels.

    “If Athens does that on Tuesday and Wednesday, then the Eurogroup can take a view on Wednesday, and then nationalparliaments can give their own approval for a third bailout. Then the firm negotiations can take place over a new bailoutfrom the ESM (where the issue of debt sustainability can also be addressed).”

    President of the Commission Jean-Claude Juncker: There is no Grexit.

    “This is a compromise, there are no winners and losers.”

    EU Council President Donald Tusk: We have an “aGreekment”.

    “Today we had only one objective, to reach an agreement. And after 17 hours, we have it…There are strict conditions to bemet. The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on anESM programme to formally begin.”

    German Chancellor Angela Merkel has told reporters that there is no need for Plan B now.

    “So the threat of Grexit is off the table, even though a new bailout hasn’t been agreed yet…But the Greek parliament mustapprove the entire conditions before the German parliament votes… It will be a long and difficult road.”

    French President Francois Hollande confirmed that the Greek agreement will include an eventual re-profiling ofGreek debt by extending the maturities.

    “This was a landmark summit…We were afraid we might not have kept Greece with us.”

    Greek Prime Minister Alexis Tsipras has defended the deal, saying he faces difficult decisions and tough dilemmas.

    “But this agreement will allow us to stand on our feet again.”At this juncture, it seems that Tsipras has gotten some of what he wanted, namely the restructuring of Greek debt. However,Merkel has ruled out on nominal haircuts, adding that the Eurogroup is only ready to consider extending the maturity onGreek loans. In the meantime, Greek banks could reopen tomorrow, although capital controls are likely to remain in place.

    We are still awaiting further details, and will update as events unfold. In short, the next 72 hours will be very crucial. But aGrexit from the Eurozone might just have been kicked down the road again.