The stand-off between Greece’s lenders has ended – sort of. The deal isn’t perfect but it paves the way for further debt relief.
The negotiations over restructuring Greece’s second bailout promised a potentially explosive end-game. The IMF wanted Greece’s debt, careering badly off course, to be cut to a “sustainable” 120 per cent of gross domestic product in 2020, from a projected 144 per cent. The euro zone, led by Germany, refused to take the principal loss that it would involve, as outright haircuts were seen as politically toxic. Without a deal, Greece would be cut adrift.