Greece to receive fresh bailout package
ATHENS — Greece got a triple dose of good news on Thursday, when creditors agreed to open talks on a third bailout package, to give the country an interim loan to cover its debts and to provide more support to its shuttered banks.
Greece’s fellow states in the 19-country eurozone said they were willing to open talks on a new rescue package worth 85 billion euros ($120 billion Cdn.) over three years after Athens approved a series of tax hikes and economic reforms overnight.
The austerity bill triggered a revolt in the governing party and demonstrations in central Athens, one of which briefly turned violent, but was required by creditors as a precondition for starting bailout talks. Because completing a new rescue deal is expected to take up to four weeks, Greece’s European creditors also agreed on interim financing. European Commission head Jean-Claude Juncker confirmed an EU-wide bailout fund would give Greece a loan to cover it through mid-August.
Finally, the European Central Bank (ECB) agreed to increase the amount of emergency credit available to Greek banks by 900 million euros ($1.3 billion Cdn.) over one week, a first step toward helping them reopen.
The banks have been closed since June 29 to staunch a bank run, with Greeks limited to cash withdrawals of 60 euros ($85 Cdn.) per day, and the ECB had not raised the credit it makes available since last month. It remained unclear how quickly the banks could reopen or when they might ease the limits on cash withdrawals.
The government must now pass a second bill through Parliament next week, which will include reforms to civil justice procedures.
The requirements are part of a deal reached between Prime Minister Alexis Tsipras and other eurozone leaders after a marathon summit in Brussels last weekend, under which Greece must implement new harsh austerity measures, including tax hikes and pension cuts, in return for the start of talks on its third bailout.
Tsipras, who was elected in January on promises of repealing bailout-related austerity measures, has acknowledged the deal tramples on most of his election pledges, but insists he had no other option than to accept the harsh terms offered by lenders to ensure his country’s financial system did not collapse.
“We had a very specific choice: A deal we largely disagreed with, or a chaotic default,” he told Parliament ahead of the post-midnight vote. Lawmakers voted 229-64 to implement the bill, in a vote that saw dozens of members of Tsipras’ own radical-left Syriza party dissent and vote against him. The bill passed with a massive majority thanks to the support of three pro-European opposition parties.
Thirty-eight party lawmakers defied Tsipras — nearly one-in-four — by voting against or abstaining.