Greek debt crisis: Parliament agrees to £61bn bailout package as ECB deadline looms

Greek members of parliament have agreed on a bailout offered by the country's creditors after marathon talks that started on Thursday (13 August). The agreement, which came in the early morning on 14 August, followed a night in which the Greek MPs discussed an €85bn (£61bn, $95bn) bailout deal from the European Stability Mechanism.

In exchange for the package, which includes a €50bn trust fund and €35bn worth of EU funding, the Greek government is forced to streamline the country's VAT system, work on the liberalisation of the labour market and improve the Greek pension system for long-term sustainability.

Prime Minister and Syriza party leader Alexis Tsipras faced tough opposition in the parliament, but argued that the bailout deal and the overhaul the party is promising for it, are the best solution for the Eurozone and Greece. The package is the third bailout the indebted country has received in 2015.

Greece will receive a loan that would serve as bridge funding along with the bailout as it faces a payment deadline on 20 August when it has to repay €3.2bn to the European Central Bank. The Eurogroup, which is meeting on 14 August, still needs to confirm agreement on the deal which might still be an obstacle, as both German and Finnish politicians have raised complaints about the package.

The news of the agreement comes only a day after it was announced the Greek economy experienced a surprise growth as year on year GDP increased by 1.5%, as opposed to a market expectation of around 0.6%. Although the news is a happy surprise after months of financial turmoil, the period measured did not cover the time of capital controls and closure of the Athens Stock Exchange.

Elwin de Groot, Senior Eurozone Strategist at Rabobank, commented on the GDP growth: "As economic confidence has been weak throughout the year, it's very likely that households have ramped up their purchases in anticipation of the capital controls,which came into effect on June 29 and suffocated the economy since then."