A deal has been reached with Greece to negotiate a bailout that will keep the near-bankrupt nation in the euro zone. (Reuters)

On Monday morning, Greek Prime Minister Alexis Tsipras capitulated in Brussels to keep the euro zone together. He returned home hours later to find a country split apart.

After a marathon 17-hour summit that turned into one of the most contentious diplomatic standoffs in European Union history, Tsipras acquiesced to a punishing ultimatum from his country’s European creditors. In exchange for a $96 billion rescue — Greece’s third in five years — he agreed to lightning-fast passage of reforms and a pledge to adhere to harsh austerity measures to save Greek banks and keep the country in the euro.

But by late Monday, it was becoming clear that the bailout that could save his nation might also cost him his job.

Tsipras had acceded far more than simple austerity, agreeing to what may amount to a fire sale of Greek utilities — or even plots of land on its famed islands — to help repay its debt. Coming from a man once seen as a leftist maverick who had pledged to free Greece from the shackles of financial injustice, the decision to surrender to European demands immediately sparked an insurrection within the unlikely ruling coalition of the far-left and the populist right.

The one thing his allies had in common was a joint enemy: Greece’s creditor nations in Europe. But after reaching a hard-won deal with them Monday, Tsipras faced a tough and humbling battle to rush through the Greek Parliament creditor-
demanded overhauls to the country’s tax and pensions system.

Although Tsipras appeared to have the votes to pass the measure with the aid of opposition parties in time to meet the creditors’ Wednesday deadline, it remained unclear whether he could push through the bills without forming a new unity government, calling for new elections or resigning.

Speaking to reporters in Brussels after the summit Monday, Tspiras sounded strangely like his nemesis — German Chancellor Angela Merkel, whose nation led a bloc of euro-zone countries to strike a hard bargain.

He offered a stark assessment of the pain to come while promising that after a period of suffering, there would be light.

“This deal secures for Greece conditions of financial stability, gives it opportunities for recovery,” he said. “Yet we knew beforehand that it would be a hard deal. The measures it contains . . . will certainly lead to recession.”

European finance ministers quickly began discussing ways to provide Greece with 7 billion euros in temporary financing to tide it over for the next month. The country is facing a 3.5 billion euro bond repayment to the European Central Bank that it cannot afford. Athens is already in arrears with the International Monetary Fund after missing a 1.6-billion-euro bill last month, making it the first developed nation to miss a payment.


Little leverage

Greece’s dire financial straits meant it had scant leverage to push back against some of its creditors’ most onerous demands. Officials negotiated for hours over a provision that calls for the nation to stash 50 billion euros’ worth of state assets in an outside fund for sale on the private market, with proceeds going mainly to recapitalize Greece’s ailing banks.

Greece has long resisted such measures but found its hands tied. Tsipras relented after creditors agreed to allow the privatization fund to be housed in Greece rather than Luxembourg. And though an even more radical proposal that could have placed Greece in a temporary “timeout” from the common euro currency was struck down, its mere existence stunned members of the Greek delegation.

The moves are fostering a deep sense of resentment among Tsipras’s allies and a conviction that Europeans sought to humiliate him. During a pivotal meeting with Merkel, French President François Hollande and European Council President Donald Tusk, Tsipras at one point received a thinly veiled threat that if he walked away and left the euro, Greece risked going it alone geopolitically, too.

According to two officials in Brussels with knowledge of the exchange, the specter was raised of aggression from Turkey — a neighboring nation viewed in Greece as a historic antagonist.

Germany bore the brunt of Greek rage. Greece’s defense minister, Panos Kammenos — head of Tsipras’s coalition partner, the Independent Greeks — called the deal a “coup by Germany” and its allies. It remained unclear whether his party would back the deal in Parliament .

“They blackmailed the prime minister,” he said in a television interview. “This agreement is not close to our values. We can’t agree.”

Meanwhile, 30 members of the ruling Syriza party threatened to resign Monday rather than approve the deal.

The shifting allegiances and lack of cohesion in the Greek government hampered negotiations. The strict pact approved Monday was portrayed by hard-line nations including Germany and Finland as essential to restoring trust in the unpredictable government in Athens.

But it was also a financial gun to the head: If Greece rejects the proposal or fails to fully comply, its banking system could collapse within days.

‘An arduous road’

“All in all, I think you can say the advantages outweigh the disadvantages,” Merkel said. If the program is strictly followed, she said, “I think there is a possibility to return to the growth path, but it is going to take a long time and it is going to be an arduous road.”

In Athens, Tsipras’s top lieutenants defended the decision even as a growing number of party members were on the brink of defection.

“There is a strong feeling among people that the negotiation was not a proper one. It’s a feeling that is there and is totally understandable,” the economic minister, George Stathakis, said in an interview in his office.

Moving forward on an agreement is likely to give the European Central Bank confidence to provide Greece’s banks more ­access to emergency funding. Banks have been shut for two weeks amid fears that they could run out of cash. The ECB is slated to make a decision Wednesday.

But even if banks receive a fresh infusion, they are unlikely to throw open their doors soon. Stathakis said onerous capital controls could last two months as Greece and its creditors work out the details of a bailout — limiting Greeks to just 60 euros a day in the meantime and banning electronic transfers out of the country. Banks cannot open, Stathakis said, until confidence in the system is restored.

A few blocks away in Syntagma Square, the chants of protesters filled the air once again Monday afternoon, as the backbone of the Greek left gathered in front of the Parliament building under a cloudless sky to vent their anger over a bailout package harsher than the one they rejected a week ago.

“This is ridiculous — a whole country voting against a referendum and then accepting these terms,” said Kiriorkus Nakkos, 23. “The left will not accept this.”

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