Greek law­mak­ers back 3rd bailout af­ter all-night de­bate

The Pak Banker - - BUSINESS -

Greek law­mak­ers ap­proved their coun­try's draft third bailout on Fri­day af­ter a nearly 24-hour marathon par­lia­men­tary pro­ce­dure cul­mi­nated in a vote that saw the gov­ern­ment coali­tion suf­fer sig­nif­i­cant dis­sent.

The gov­ern­ment needed the bill to pass in time for Fi­nance Min­is­ter Eu­clid Tsakalo­tos to head to Brus­sels to meet his eu­ro­zone coun­ter­parts, who will de­cide Fri­day af­ter­noon whether to ap­prove the draft agree­ment.

The res­cue pack­age would give Greece about 85 bil­lion eu­ros ($93 bil­lion) in loans over three years in ex­change for harsh spend­ing cuts and tax hikes. Un­able to bor­row on the in­ter­na­tional mar­kets, another bailout is all that stands be­tween Greece and a dis­or­derly de­fault on its debts that could see it forced out of Europe's joint cur­rency. The bill passed thanks to sup­port from op­po­si­tion par­ties, with 222 votes in fa­vor, 64 against, 11 ab­sten­tions and three ab­sent in the 300-mem­ber par­lia­ment.

Although ap­proved by a com­fort­able ma­jor­ity, the re­sult was a blow to Prime Min­is­ter Alexis Tsipras, who saw more than 40 of his 149 rad­i­cal left Syriza party law­mak­ers vote against him. He has come un­der in­tense crit­i­cism from party hard­lin­ers for ca­pit­u­lat­ing to the cred­i­tors' de­mands for bud­get cuts - aus­ter­ity mea­sures he had promised to op­pose when he won elec­tions in Jan­uary.

The bill in­cludes re­forms in­creas­ing per­sonal, com­pany and ship­ping taxes, re­duc­ing some pen­sions, abol­ish­ing tax breaks for some groups con­sid­ered vul­ner­a­ble and im­ple­ment­ing deep spend­ing cuts, in­clud­ing to the armed forces. The mount­ing dis­cord within Syriza is threat­en­ing to split the party and could lead to early elec­tions. That stock mar­ket in Athens slid on the news and was down 2.3 per­cent in mid­day trad­ing.

State tele­vi­sion said Tsipras was ex­pected to call a vote of con­fi­dence in his gov­ern­ment, but that was not con­firmed.

"Truly to­day we had a large ma­jor­ity that voted for the agree­ment, but we also had a num­ber of law­mak­ers who chose a dif­fer­ent course," said gov­ern­ment spokes­woman Olga Gerovasili. "There­fore, as the prime min­is­ter said dur­ing his speech, ev­ery­thing that is nec­es­sary will be done, ad­her­ing al­ways to the reg­u­la­tions (of par­lia­ment) and the con­sti­tu­tion."

Gerovasili re­fused to give de­tails on a po­ten­tial early elec­tion, but said any ac­tion would come af­ter Aug. 20, when Greece has to make a large debt re­pay­ment to the Euro­pean Cen­tral Bank. Cul­ture Min­is­ter Nikos Xy­dakis, speak­ing on state tele­vi­sion, said early elec­tions were now likely.

"The agree­ment has cost the gov­ern­ment its ma­jor­ity ... As things have turned out, the clear­est so­lu­tion would be elec­tions," he said. The deal will also need ap­proval from the par­lia­ments of sev­eral other coun­tries, in­clud­ing that of Greece's harsh­est critic, Ger­many, be­fore any funds can be dis­bursed. Some na­tions, such as Fin­land, have al­ready given their ap­proval.

Syriza dis­senters an­grily chal­lenged the gov­ern­ment dur­ing the all­night par­lia­men­tary ses­sion. "I feel ashamed for you. We no longer have a democ­racy ... but a eu­ro­zone dic­ta­tor­ship," prom­i­nent party mem­ber and for­mer energy min­is­ter Pana­gi­o­tis Lafaza­nis said be­fore the vote. Lafaza­nis co-signed a dec­la­ra­tion along with another 12 left-wing politi­cians Thurs­day declar­ing they would start a new anti- aus­ter­ity move­ment. He stopped short of quit­ting Syriza.

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