Greek house backs reforms, eurozone verdict awaited
EU officials hopeful of an agreement by weekend to keep Greece afloat.
Skeptical European finance ministers gathered on Saturday to decide whether to negotiate a third bailout for Greece after Prime Minister Alexis Tsipras won lawmakers’ backing for painful austerity measures his leftist party was elected to prevent.
With Athens staring at a bankruptcy that could see it crash out of the euro zone after financial markets reopen on Monday, EU officials forecast agreement would be reached by the end of the weekend to keep Greece afloat, but not before ministers and government leaders had vented their wrath at Tsipras.
Wolfgang Schaeuble, Finance Minister of its biggest creditor Germany and a veteran stickler for the EU’s fiscal rules, said negotiations would be “exceptionally difficult”.
Since Tsipras’s leftist gov- ernment won power in January, he said, emerging optimism about Greece had been “destroyed in an incredible way in the last few months”.
Other ministers arriving for the Eurogroup meeting also spoke of a fundamental lack of trust after years of broken Greek promises and a snap referendum Tsipras called, in which voters massively rejected creditors’ terms he has since had to embrace.
However, sources familiar with a preparatory meeting earlier on Saturday said ministers’ aides had endorsed with reservations a recommendation by EU institutions and the IMF that Tsipras’s proposals did provide a basis to launch negotiations.
“We are still far away,” said Jeroen Dijsselbloem, the Dutch Finance Minister who was chairing the meeting. “On both content and the more complicated question of trust, even if it’s all good on paper the question is whether it will get off the ground and will it happen ... We are facing a difficult negotiation.”
In Athens overnight, Tsipras had to rely on opposition votes from the right in parliament after some of his leftist lawmakers resisted spending cuts, tax rises and other measures he proposed in order to unlock 54 billion euros in three-year credit.
But Germany, the biggest lender in two previous bailouts totaling 240 billion euros ($265 billion) since 2010, is deeply skeptical after five months of abortive talks with Tsipras. GREEK PARLIAMENT With Greece’s banks shut and completely dependent on a credit lifeline from the European Central Bank, the measures were seen as a last chance to avert financial collapse.
But in an ominous sign for the stability of the Greek government, 10 members on the ruling benches abstained or voted against the measures and another seven were absent, leaving Tsipras short of the 151 seats needed for a majority of his own.
Prominent left-wingers in his Syriza party signaled before the vote that they could not support the mix of tax hikes and spending cuts proposed by Tsipras, following the rejection of similar austerity measures by voters in Sunday’s referendum.
Energy Minister Panagiotis Lafazanis, Deputy Labour Minister Dimitris Stratoulis as well as the Speaker of Parliament, Zoe Constantopoulou, all called “Present”, in effect abstaining from the vote and withholding their support from the government.
“The government is being totally blackmailed,” Constantopoulou said.
Following the vote, where many leftists in his own party were stunned by his acceptance of previously spurned austerity measures, Tsipras said he would now focus on securing a deal. “The Parliament on Saturday gave the government a strong mandate to complete the negotiations and reach an economically viable and socially fair agreement with its partners,” he said. Iran, the United States and other major powers struggled on Saturday to break a deadlock in nuclear talks that has held up a historic deal that would bring sanctions relief for Tehran in exchange for curbs on its atomic program.
Tehran and the six powers have given themselves until Monday to reach a nuclear agreement, their third extension in two weeks, as the Iranian delegation accused the West of throwing up new stumbling blocks to a deal.
Among the biggest sticking points at the moment is Iran’s insistence that a United Nations Security Council arms embargo and ban on its ballistic missile program dating from 2006 be lifted immediately if an agreement is reached.
Russia, which sells weapons to Iran, has been publicly supporting Tehran on this issue.
However, a senior Western diplomat said earlier in the week the six powers — the United States, Britain, Germany, France, Russia and China — remained united over the issue, despite Moscow’s and Beijing’s well-known dislike of the embargos.
Western powers have long suspected Iran of aiming to build nuclear bombs and using its civilian atomic energy program to cloak its intention — an accusation Iran strongly denies.
Other problematic issues in the talks are access for inspectors to military sites in Iran, answers from Tehran over past activity and the overall speed of sanctions relief.
“Still have difficult issues to resolve,” US Secretary of State John Kerry tweeted on Saturday after meeting Iran’s Foreign Minister Mohammad Javad Zarif.
The two men have met nearly every day since Kerry arrived in Vienna more than two weeks ago for what was intended to be the final phase in a negotiation process lasting more than year and a half aimed at securing a long-term deal with Iran.
Also present at Saturday’s meeting was European Union foreign policy chief Federica Mogherini. Kerry also met with German Foreign Minister Frank-Walter Steinmeier. The US delegation has not provided readouts of Saturday’s meetings.
Kerry told reporters late on Friday the atmosphere in the talks was constructive.