Greece debt crisis: Inside the deal in which 'there are no winners or losers'

After the tense overnight negotiations a former Polish Prime Minister was instrumental in ensuring that an agreement was finally struck

Alexis Tsipras announces a deal at the end of the overnight talks at the eurozone leaders’ summit in Brussels (EPA)

If anyone deserved the credit for apparently pulling Greece and the European Union back from the brink it was Donald Tusk, the former Polish Prime Minister.

Some 14 hours into the all-night talks, the German Chancellor, Angela Merkel, and the Greek Prime Minister, Alexis Tspiras, were said to have reached an impasse, almost certainly over who should control the special fund of Greek state-owned assets that are meant to be sold off to help pay for the bailout.

Both were heading for the door of the chamber in the Lex building where they had been closeted all night, apparently convinced that Grexit was now the only possible outcome, when Mr Tusk, who is President of the European Council, delivered a rebuke. “Sorry, but there’s no way you’re leaving this room,” he told them.

Three hours later, a deal of a kind was finally done. But the makings of the agreement – heralded by some as an end to five years of anxiety over the Greek rollercoaster, even if few in the chancelleries across Europe are willing to bet on it – involved a long night of angst and acrimony.

The Greek Finance Minister Euclid Tsakalotos and International Monetary Fund head Christine Lagarde at the meeting (Reuters)

It was Mr Tusk, one of the few EU leaders prepared to argue Greece’s case, who had announced the Sunday summit, making clear that he was preparing the ground for a possible Grexit after last week’s anger that Mr Tsipras had turned up empty-handed at a previous gathering.

The Greek Prime Minister had finally got the message and sent a contrite letter to Greece’s eurozone creditors, seeking a new bailout, and promising to enact most of the reforms he had previously denounced. Yet by Saturday, the refrain from eurozone finance ministers was that trust had been shattered, and many declared they wanted Greece to leave the euro.

The German Finance Minister Wolfgang Schäuble presented plans for a five-year “temporary” Grexit, and succeeded – for a few hours – in putting his scheme in the draft summit conclusions.

When Mr Tusk pressed on with the full summit he said his main aim was to avoid Grexit – but other leaders were as hostile as their finance ministers. “The Greeks would do best if they left the eurozone on their own, did their homework and then tried to come back,” said the Slovakian Prime Minister, Robert Fico.

Donald Tusk is reported to have prevented Merkel and Tsipras from leaving before doing a deal (Reuters)

Inside the summit chamber, the mood soon turned ugly. Mr Tsipras was described by one official as behaving like a “beaten dog”. The Dutch Prime Minister, Mark Rutte, reportedly engaged in a fierce altercation with his Italian counterpart Matteo Renzi, one of Mr Tsipras’s few remaining allies. Mr Renzi later admitted, “There were a few moments in which if I’d had to bet I would have put my money on the failure of negotiations and so on a Grexit.”

At one point Mr Schäuble snapped at Mario Draghi, President of the European Central Bank, “Don’t take me for a fool”.

Fellow leaders demanded ever-more concessions of Mr Tsipras as the price for another bailout. The trickiest element was the German plan for €50bn in Greek state assets to be placed in a trust fund beyond government reach, and sold off with proceeds going directly to pay down debt. Mr Schäuble suggested this would be managed by a Luxembourg-based trust that would hold them as collateral. When details of the fund plan leaked out, concerns were raised about whether this was tantamount to turning Greece into a German protectorate: the Twitter campaign #thisisacoup showed how public opinion was shocked.

As fatigue began to set in, Mr Tusk broke off the summit for occasional smaller sessions involving Mr Tsipras, Ms Merkel and the French President François Hollande. Other leaders used these moments to catch up on sleep. In the early hours, the Slovenian Prime Minister Miro Cerar left, asking Mr Rutte to vote on his behalf, as he had to return home to host a meeting. The Lithuanian President Dalia Grybauskaite followed soon after.

Eventually, Mr Hollande brokered a deal on the privatisation fund: it would go ahead, but would be managed from Greece, not Luxembourg. It was a question of sovereignty, Mr Hollande said. “Nothing would have been worse than humiliating Greece.”

The deal also offered a crumb of hope for Greece about restructuring its debt, currently 180 per cent of GDP, with the final statement saying the eurozone stood ready to consider possible additional measures “aiming at ensuring that gross financing needs remain at a sustainable level”.

Mr Tusk finally appeared in front of the press at 9am local time to confirm the deal. “We have agreement,” he said. Alongside him, the European Commission President Jean-Claude Juncker offered a deadpan assessment of the deal. “In this compromise, there are no winners and no losers,” he said. “It is a typically European arrangement.”