The price for the European finance ministers to unblock this morning the aid of 130,000 million euros includes important assignments

Greece will have to pay with more than money the loan that the countries of the eurozone and the International Monetary Fund have promised to avoid the risk of bankruptcy once again.

The price for the European finance ministers to unblock this morning the help of 130,000 million euros includes important cessions of national sovereignty that Germany and Holland claimed essentially to maintain their financial assistance.

They have been part of their conditions for, today at five in the morning, after thirteen hours of meeting in Brussels, give the green light to the second rescue plan of Greece.

This aid will be completed with around 107,000 million in debts that their private creditors have pledged to forgive him to collaborate in the difficult cause that, at some point, the country becomes financially independent again.

The external control of the Greek budgetary decisions was one of the issues that complicated the negotiation of the Eurogroup. “The best way to control Greece is through money,” said Dutch finance minister Jan Kees de Jager at the start of the meeting.

“A country remains sovereign to some extent” when it receives international financial assistance. If Greece “has the right” to hold elections in April, he added, the countries that lend it money are also entitled to control how it is spent.

“I understand that this is not very popular in Greece,” De Jager concluded, echoing demands imposed by Germany although, for obvious political reasons, he can not afford to express it so clearly in public.

Finally, Athens has given in. The experts of the European Commission will have “a reinforced and permanent presence on the ground”, as well as Troika officials (ECB, IMF and EC), which will “substantially strengthen” their presence in Greece to detect and neutralize any deviation in time budget, has explained at dawn, in a press conference, the president of the Eurogroup, Jean Claude Juncker.

This international protection will be completed with the use of an armored bank account where the EU and the IMF will promptly deposit the money that the Greek government needs to pay its external debts, in order to guarantee that the country will honor its commitments with its creditors. and the loan is not spent on, for example, “financing an immense administration financed by cheap loans”, as requested this morning by Olli Rehn, European Affairs Commissioner.

This measure, they argue, will prevent Greece from spending more than it enters and would force it to make more restrictive budgets, and according to its financial situation.

It will be a temporary measure until Greece carries out the legal and also constitutional reform necessary to give absolute priority to the payment of the debt. This is what Spain has done, preventively, through the constitutional reform approved in August in an attempt to calm the markets.

In the case of Greece, a country whose politicians are immensely distrustful, the risk of this option for the EU is that at any moment a government cancels this provision.

The objective of these new mechanisms of external control, which imply a cession of sovereignty without equal in Europe, is to neutralize once and for all the capacity of Greece to threaten to bankrupt its eurozone partners every six months, as it has happened since May 2010, it was agreed to give the first loan of 100,000 million euros.

The most laborious point of the negotiations consisted in trying to limit the cost of the second rescue plan to 130,000 million euros, as agreed to do in October last year. But since then Greece’s economic recession has worsened and the price of the bailout has grown parallel to the wrath of the Greeks.

Given the refusal of northern countries to contribute one euro more than expected, the Eurogroup negotiated adjustments on all fronts.

European central banks that have bought Greek debt will reverse their profits in the country’s rescue plan, a measure valued at 1,800 million euros.

The interest rate charged for the loans will also be lowered (from 3% to 1.5%) so that the country (and the rescue plan) will save 1,400 million euros.

The European Central Bank will contribute with a similar mechanism with 1,800 million. Finally, Greece’s private creditors have reluctantly agreed to take greater losses than anticipated in their investments in their debt bonds: 53% instead of 50% previously negotiated.

The restructuring of the debt should be effective in the coming weeks.

Despite all these adjustments, the eurozone has been unable to guarantee that the Greek public debt will be below 120% in 2020, the level that was considered sustainable and guarantee of the solvency of the country.

The financial creativity exercises of the Eurogroup place it at 120.5% in eight years, compared to the current 160%. But the report of the troika on the effectiveness of the program puts in doubt this objective and emphasizes that the whole plan is prone to suffer accidents and deviations.

The 130,000 million euro loan agreed by the Eurogroup and the IMF will be paid to Greece until 2014; this help is added to the 100,000 already delivered so far and the other 100,000 that the bank has forgiven.

What will happen next in Greece? The key is, as the Spanish Minister of Economy Luis De Guindos said yesterday, is that the country recovers capacity to grow and create employment: “If Greece does not grow again in the coming months, if it is not able to return to the markets by itself, then the problems will be reproduced, “he warned.