This piece was originally published on July 13th. On the morning of July 13th an agreement was reached, concerning measures that, in our opinion, justify talks regarding a new aid program for Greece. In the next couple of days, Greece will have to make parliamentary decisions, generating the necessary pre-conditions for this. Our primary goal in these extremely difficult negotiations was and will be to keep Europe united. If we fail, the consequences are impossible to calculate for everybody. For the SPD (German Social Democratic Party) there is no doubt: France has to be included in the solution, because Europe's promotion requires pooled forces. As part of the Federal Government of Germany, we have always emphasized that for social democracy, it is essential that any solution is supported both by France and Germany. Therefore, we have done everything to make sure that Germany and France can act side-by-side and that there will be no rift, tearing Europe apart, with single groups of member states opposing each other. That would have been incredibly harmful for Europe and it would have happened if we had failed to overcome our differences last night. The goal is Greece's fate in the Euro. We owe the fact that an agreement regarding this could be made to two circumstances: First, the Greek government have shown their willingness to compromise. The rules of the Euro apply and are acknowledged by Greece. Second, the other European member states have proven their willingness to compromise, since the agreed measures contain new elements, including an investment program of €35 billion from European funds, which provide €1 billion as an immediate impulse for growth. On top of that, €12.5 billion from privatization revenues shall support the investments. Greece has to introduce hard reforms, but it also needs quick and palpable investments to heal economically. During the weekend a lot of time was spent negotiating about the capacity of bearing the debts. As a result, Greece will increase the utilization of privatization revenues. Greece will establish an independent fund, run by the Greek authorities and supervised by European institutions. Government assets will flow into this fund, which is expected to yield €50 billion in privatization revenues. €25 billion of these expected revenues shall be used to finance the recapitalization of the banks. €12.5 billion to improve the debt sustainability and another €12.5 for capital expenditures. We agree that there can be no nominal debt relief in the Eurozone. It would violate the rules of the bailout ban. However, the Eurogroup has very well agreed that Greece can obtain further debt relief by means of the extension of payment obligations, as long as the package of measures is implemented. This is another very important element in the conciliation, and it is creating hope that there can be a way out of the downward spiral of recession and debt. Now it will be important to restore the trust. The Greek government has to prove the credibility of their commitment to the reforms. Therefore, one condition for further negotiations will be the passing of first measures by Greece before July 15th. This includes the simplification of the system of value added tax and first pensions reforms. Additionally, the Greek parliament has to accept the entire package of measures documented in the Eurogroup statement. The Greek Prime Minister has recommended accepting the package to his parliament. We bet that he will succeed, even though it contains even more far-reaching reforms than the ones that were declined in the Greek referendum. This is another reason why it is important to appreciate the discretion and the willingness for compromise that the Greek government has accomplished last night. Should the Greek parliament agree, the German Parliament will also have to meet, for necessary details of an ESM auxiliary program will be decided in the German Parliament. We are convinced that social democracy should pioneer negotiations in these decisive days for Europe. We know that this isn't an easy step, neither for the taxpayers nor for the members of the German Parliament. We are talking about a total of financing requirements of €82 to € 85 billion in loans and guarantees over the next years. Yet, we are convinced that Germany can and should contribute to the solidarity of Europe. The days ahead won't be easy for anyone involved. Especially, the citizens of Greece will have to shoulder big tasks in the coming years. But even for Germany, this decision in favor of further financial aid is of considerable consequence. Yet, one thing is more important than anything else: Europe has passed a historic test and has again come together. In this we may find joy and the courage for later decisions. This post first appeared on SPD.de __________________ This post appeared on HuffPost Germany and was translated into English. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
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