Tsipras ‘u-turn to get a bailout’
But Greek Premier has to persuade own party
GREECE’S prime minister made a U-turn on austerity yesterday in a last- ditch bid to secure a third bailout for his country. Alexis Tsipras said he would accept what many interpreted as harsher austerity measures than those rejected by the Greek people in a referendum on Sunday.
He was locked in angry debates with his MPs last night as he tried to get agreement for the deal before a ‘final’ meeting of eurozone finance ministers, including Michael Noonan, in Brussels set for today.
After walking into a party meeting to applause, Mr Tsipras tried to rally his Syriza lawmakers behind the fresh proposals ahead of a snap vote in parliament.
He urged them to help Greece stay in the euro, but faced some resistance from leftists stunned by his acceptance of previously spurned austerity measures.
‘Not a mandate to quit euro’
‘We are confronted with crucial decisions,’ Mr Tsipras told his party, said a Greek official.
‘We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not a mandate to take Greece out of the eurozone,’ he said. ‘We are all in this together.’
The latest reform package was strikingly similar to the terms Greeks rejected in a referendum last Sunday, angering members of the Syriza’s hardline Left Platform wing.
Five of them signed a letter saying it would be better to return to the drachma, Greece’s pre- euro currency, than to swallow more austerity with no debt write-off.
‘The proposals are not compatible with the Syriza programme,’ said energy minister Panagiotis Lafazanis, who belongs to the far-left faction.
He declined to say how he would vote in the plenary ballot expected last night. ‘We will take it step by step.’
Mr Tsipras i s said to be demanding cuts to Greece’s debts in return for accepting measures including tax rises and cuts to pensions.
Mr Tsipras, though, was assured of backing from opposition lawmakers to carry the vote, but his political position would be weakened. The centrist opposition To Potami party and the main centre-right opposition New Democracy said they would support him.
If approved, Greece would get a three- year l oan package worth nearly €53.5billion as well as some form of debt relief.
But it is not clear whether a deal can be agreed in time to stop Greece crashing out the eurozone.
Germany, Slovakia and Latvia voiced doubts about the credibility of promises by Mr Tsipras, who is promoting measures he opposed last week.
But socialist French president Francois Hollande – among Greece’s few allies in recent weeks – described the Greeks’ proposals as ‘serious and credible’.
Ratings agency Moody’s predicted that Greek banks, shut for a fortnight, will run out of money by tomorrow.
EU leaders, who have grown frustrated by the antics of Greece’s far-left Syriza government, voiced serious doubts about Mr Tsipras’s plan.
But the euro soared and Greek borrowing costs tumbled last night on hopes of a last- ditch deal to save the stricken country from going bust.
Global stock markets also ended the week on the front foot as investors put faith in Athens doing enough to secure
a new bailout from its creditors. The White House said it welcomed the latest proposal by Greece to resolve its debt crisis and that it was something for that country’s creditors to weigh.
The lenders’ backing is crucial for eurozone leaders to support the proposals.
European Commission President Jean- Claude Juncker, European Central Bank president Mario Draghi and International Monetary Fund head Christine Lagarde discussed the plan in a teleconference with Jeroen Dijsselbloem.
He is the Dutch finance minister who chairs the board of the European Support Mechanism and the Eurogroup of 19 eurozone finance ministers who must approve or reject Athens’ bailout application.
Mr Dijsselbloem said after the call that he was still waiting for a technical analysis.
‘Incompatible with Syriza’