[WATCH] Muscat 'fears Greece suffered humiliation: EU Summit wasn’t a pretty sight’

At the end of marathon talks that lasted 22 hours, the 19 leaders of the Eurozone emerged with a deal that would pave the way for Greece to kickstart the process for a memorandum of understanding on a bailout to be negotiated with the ESM and the IMF.

This third bailout is worth €86 billion.

Greek prime minister Alexis Tsipras was forced to make a U-turn on his anti-austerity pledge and give in to the majority of his creditors’ demands, even harsher than the programme which the Greeks voted against.

Among other proposals, Tsipras agreed to park €25 billion worth of assets in a fund that would be held in Greece for the repayment of recapitalization of banks. The original German proposal – that came in on Friday – was set at €50 billion and the assets would be held in a fund in Luxembourg. It was vehemently opposed by Tsipras and several member states agreed that the €50 billion request was “exorbitant”. The fact that it would be held outside Greece also raised questions on sovereignty.

A compromise was subsequently reached to downscale the figure, hold the fund in Greece with the institutions supervising it.

“It wasn’t a pretty sight,” Prime Minister Joseph Muscat said, when asked to comment on the perception of “a vindictive” EU.

Speaking to reporters following the marathon talks, Muscat said it was obvious that a number of elements had to be included in the agreement. At the same time, he conceded that “a number of other things could have been avoided”.

“From our end we wanted a clear commitment that no haircuts will take place. We agreed to flexibility on a number of conditions and a timetable for the implementation of prior actions.

“But there were other things which we could have done away with. I think that winning in negotiations is good but the adversary shouldn’t be humiliated. I fear that Greece might have been humiliated and this could have been avoided.”

Muscat added that “one also understands that this was partly the result of certain decisions taken by Greece, including going for a referendum”. He said that Greece “could have walked off with a much better deal if it had agreed to the programme presented before the referendum”.

The Greek Prime Minister said: "Deal is difficult but we avoided transfer of assets abroad and plan for liquidity asphyxiation. We won mid-term funding and debt relief.”

Tsipras said that the deal maintained liquidity and gave hope of recovery: “We know deal will be difficult to implement and may be recessionary."