Greek and European leaders are paving the way for a third bailout.
By ABC News July 13, 2015, 11:44 AMProtesters hold signs reading 'there is no agreement in eurozone-there is no future in the European Union' during an anti-EU demonstration, July 12, 2015, in Athens.
Louisa Gouliamaki/AFP/Getty Images— -- After nearly 17 hours of negotiations, Greece and its creditors reached a deal today that keeps the nation in the European Union -- avoiding an unprecedented "Grexit," while paving the way for a third bailout.
But the Greek people are not "out of the woods" yet, economists say. It's not clear when banks will re-open for Greeks, who have been withdrawing a maximum of 60 euros a day since June 29.
In addition, there are people who believe Germany and other European nations dealt Greece a harsh hand, spurring the hashtag "#ThisIsACoup."
Brookings Institution fellow Douglas Elliott told ABC News that the deal is a "substantially better outcome" than a failure to reach one, because banks should soon re-open soon and the agreement avoids damage that would come initially if Greece dropped the euro.
"However, there will be a lot of adjustment pain from the restructuring of the economy, including wage cuts and job losses until the economy improves," Elliott said.
Here are some ways Greece's deal will affect the country:
The three-year bailout deal provides for about 85 billion euros of new funding in loans. But the details are still being ironed out about Greece's existing debts, or debt restructuring.
Greece needs about 7 billion euros by July 20, including 3.5 billion euros to the European Central Bank. The nation also owed 5 billion euros by in a month.
“[Greek prime minister Alex] Tsipras will need to argue to his party in Parliament and to the Greek people that the promise of debt relief and access to ‘humanitarian’ funds are what he is getting in return for more tax increases, pension cuts, and structural reforms," said Robert Murphy, a Boston College economics professor. "But the agreement rules out reductions in the face value of Greece’s debt, so any debt relief would be though lengthening of repayment schedules and/or reductions in interest charges."
Elliott said this deal was better than a short-term one Greece proposed for around 15 billion euros from the remaining funds that were available under the program that ended in June.
Greece's corporate and value-added taxes (VAT) will rise while pension reform will continue as planned.
"Austerity will continue and Greeks will see their incomes further reduced," said Hari Tsoukas, Warwick Business School professor in the U.K. "Unemployment is unlikely to come down when recessionary measures are adopted."
Greece agreed to the sale of state assets worth 50 billion euros, including recapitalized banks. The majority of those profits will go to a trust fund controlled by Greece creditors to pay off debts, while some of it will be invested in Greece.
“There are now some real glimmers of hope," Boston College economics professor Peter Ireland said. "Many of the reforms demanded by its creditors, aimed at liberalizing product and labor markets, are essential for rebuilding Greece's economy."
Elliott said there were a few "face-saving" concessions in the deal, including room for the maturity of some Greek debts to be lengthened and their interest rate chopped further, plus "the carrot of a potential 35 billion euro investment fund for Greek projects, spread over three to five years."
Tsoukas said, "Greek debt is simply too high for it to be paid back by an economy that has lost 25 percent of its GDP and has stopped growing."
Tsoukas said the radical left-wing Greek government "will pretend to implement reforms it does not believe in."
The deal reached today includes measures that are similar if not worse than the austerity measures that the majority of Greeks rejected in a referendum on July 6. Greek parliament must vote on Wednesday on the deal.
"How can its government own up to a program it has always protested against?" Tsoukas said, adding that 15 Syriza members of parliament who voted for the program have already committed themselves publicly to oppose relevant legislation that will enact specific measures.
Tsoukas predicts political fallout, but later on.
"Mr. Tsipras is still the most powerful politician in Greece and people trust him for standing up to creditors to the last moment," Tsoukas said. "That his decisions deteriorated the economy and closed the banks, thus making the terms of the bailout agreement particularly harsh, is something that will not dramatically dent Mr. Tsipras' reputation."
