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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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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