After negotiations continued throughout the night an agreement has finally been made between Greece and its EU creditors with regard to a bailout package. Initial information appears to suggest however that the deal which has been accepted by the Greek Prime Minister Tsipras is harsher than that which was on the table last week which was convincingly rejected by the Greek public.

In order for the bailout to go through Tsipras must, by Wednesday, have passed laws in Greek parliament which incorporate a rise in the sales tax, pension cuts, change the bankruptcy code, make spending cuts automatic if a budget target is missed and safeguard the independence of the statistics office. The latter clearly represents a distrust which still exists between Greece and its creditors.

In a further safety measure the EU creditors also want Greece to transfer as much as €50bn of state assets to a Luxembourg based company. This will then look to sell or raise cash from them.

In return Greece will receive a bailout of up to 86bn euros. If it fails in any of the requirements set in the agreement however it appears that the result will be Greece exits the single currency. Tsipras failed in his objective of agreeing a cut in the nominal value of Greek debt. In a much tamer compromise interest payment grace periods and longer maturities will be discussed once the Greek progression has been evaluated.

Equity markets have responded positively this morning, with the FTSE 100 up 0.6% at 6,713.57 whilst the EStoxx 50 is up 1.54% at 3,583.09.