How a painful Greek agreement was hammered out

If Greece steps up to Europe's demands it will get a third bailout. Photo / AP

Text variations before the final agreement was reached reveal the enormity of what was at stake.

Greece has to push a series of austerity demands through its Parliament to unlock a third bailout worth as much as 86 billion ($141 billion).

Here we outline what those demands are and how different versions of the deal - contained in an early, leaked draft and the final, seven-page statement from the eurozone summit in Brussels - shifted and were hardened up in the 17 hours of negotiations.

New austerity demands

Greece has until tomorrow to pass laws that implement VAT hikes; cut pensions; take steps to ensure the independence of the national statistics office; and put measures in place to automatically slash spending if targets on primary surpluses fail to be met. It has until July 22 to overhaul its civil justice system and bring bank resolution laws in line with the rest of the EU. Greece will also have to sell 50 billion worth of assets.

Privatisation

The biggest change to the deal wording relates to the 50 billion privatisation fund that will be used to generate cash. The fund will be managed by the Greeks instead of an initial proposal to transfer the assets to an "external and independent fund". Some of the money will also be used to boost growth and to repay money used to recapitalise Greece's banks. Its initial purpose was solely to pay down Greece's debts.

Martin Schulz, the head of the European Parliament, said it was only right that Greeks managed their own assets. He also revealed it was Jean-Claude Juncker, the chief of the European Commission, who proposed the idea, not Wolfgang Schaeuble, Germany's Finance Minister.

Draft text:

"Valuable Greek assets of [50 billion] shall be transferred to an existing external and independent fund like the Institution for Growth in Luxembourg, to be privatised over time and decrease debt.

Such a fund would be managed by the Greek authorities under the supervision of the relevant European institutions."

Final text: "The monetisation of the assets will be one source to make the scheduled repayment of the new loan of ESM and generate over the life of the new loan a targeted total of 50 billion, of which 25 billion will be used for the repayment of recapitalisation of banks and other assets and 50 per cent of every remaining euro will be used for decreasing the debt to GDP ratio and the remaining 50 per cent will be used for investments.

This fund would be established in Greece and be managed by the Greek authorities under the supervision of the relevant European Institutions."

IMF involvement

Alexis Tsipras, Greece's Prime Minster, reportedly asked for no International Monetary Fund involvement in a third bailout deal. But Greece will now have to deal with the IMF.

Draft text: "The Eurogroup expects continued full involvement of the IMF and welcomes the intention by Greece to seek full involvement of the IMF in the monitoring and financing of the programme."

Final text:

"A euro area member state requesting financial assistance from the ESM is expected to address, wherever possible, a similar request to the IMF. This is a pre-condition for the Eurogroup to agree on a new ESM programme. Therefore Greece will request continued IMF support (monitoring and financing) from March 2016."

Debt sustainability

Eurozone leaders blamed the Greek Government for its "easing of policies". "There are serious concerns regarding the sustainability of Greek debt. This is due to the easing of policies during the past 12 months ..."

The olive branch

The final text notes 35 billion will be made available to Greece as part of a growth package. The money had been earmarked from EU structural funds, but leaders committed to releasing an extra 1 billion to stimulate the economy.