We'll keep the blue flag flying here. Photo: Getty Images
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Grexit avoided as Greece reaches "humiliating" bailout deal with Eurozone creditors

After 16 hours of negotiations, a deal has been reached between Greece and its creditors. 

After 16 hours of negotiations, Greece and the rest of the Eurogroup this morning reached a deal on a new bailout.

"There will not be a Grexit," Jean-Claude Juncker, the head of the European Commission, reassured reporters. What there will be instead is €82-6bn worth of new funding, while €50bn of state assets will be privatised, with €37.5bn going to Greece's creditors and €12.5bn going to growth initiatives. Greece will have to reform its VAT arrangements and pensions, and sign up to immediate spending cuts if it breaches its targets.

The deal will be voted on by the Greek parliament by Wednesday and then ratified by the national parliaments of several other Eurozone nations.

The tough terms of the deal mean it will be controversial, with some questioning why Greek leader Alexis Tsipras accepted stringent conditions on new lending after winning a referendum on the bailout last week. Commentators have compared the harshness with the Treaty of Versailles, and Nobel Prize-winning economist Paul Krugman said the terms strayed into "pure vindictiveness".

Germany's Angela Merkel, asked about the Versailles comparison, said that she never made "historical analogies, " while Jean-Claude Juncker said: "I don’t think that the Greek people have been humiliated and I don’t think the other Europeans were losing their face. It’s a typical European arrangement."

Exclusive: "We were set up". Read the NS interview with former finance minister Yanis Varoufakis here.

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Commons Confidential: Fearing the Wigan warrior

An electoral clash, select committee elections as speed dating, and Ed Miliband’s political convalescence.

Members of Labour’s disconsolate majority, sitting in tight knots in the tearoom as the MP with the best maths skills calculates who will survive and who will die, based on the latest bad poll, observe that Jeremy Corbyn has never been so loyal to the party leadership. The past 13 months, one told me, have been the Islington rebel’s longest spell without voting against Labour. The MP was contradicted by a colleague who argued that, in voting against Trident renewal, Corbyn had defied party policy. There is Labour chatter that an early general election would be a mercy killing if it put the party out of its misery and removed Corbyn next year. In 2020, it is judged, defeat will be inevitable.

The next London mayoral contest is scheduled for the same date as a 2020 election: 7 May. Sadiq Khan’s people whisper that when they mentioned the clash to ministers, they were assured it won’t happen. They are uncertain whether this indicates that the mayoral contest will be moved, or that there will be an early general election. Intriguing.

An unguarded retort from the peer Jim O’Neill seems to confirm that a dispute over the so-called Northern Powerhouse triggered his walkout from the Treasury last month. O’Neill, a fanboy of George Osborne and a former Goldman Sachs chief economist, gave no reason when he quit Theresa May’s government and resigned the Tory whip in the Lords. He joined the dots publicly when the Resolution Foundation’s director, Torsten Bell, queried the northern project. “Are you related to the PM?” shot back the Mancunian O’Neill. It’s the way he tells ’em.

Talk has quietened in Westminster Labour ranks of a formal challenge to Corbyn since this year’s attempt backfired, but the Tories fear Lisa Nandy, should the leader fall under a solar-powered ecotruck selling recycled organic knitwear.

The Wigan warrior is enjoying favourable reviews for her forensic examination of the troubled inquiry into historic child sex abuse. After Nandy put May on the spot, the Tory three-piece suit Alec Shelbrooke was overheard muttering: “I hope she never runs for leader.” Anna Soubry and Nicky Morgan, the Thelma and Louise of Tory opposition to Mayhem, were observed nodding in agreement.

Select committee elections are like speed dating. “Who are you?” inquired Labour’s Kevan Jones (Granite Central)of a stranger seeking his vote. She explained that she was Victoria Borwick, the Tory MP for Kensington, but that didn’t help. “This is the first time you’ve spoken to me,” Jones continued, “so the answer’s no.” The aloof Borwick lost, by the way.

Ed Miliband is joining Labour’s relaunched Tribune Group of MPs to continue his political convalescence. Next stop: the shadow cabinet?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage