Greece offered a lifeline by Europe

Greek MPs will have to agree swiftly to meet ‘humiliating’ bailout reforms and hand citizens another dose of austerity

ATHENS // European Union leaders agreed to offer Greece its third bailout in five years, provided the country passes agreed reforms by tomorrow.

Greek prime minister Alexis Tsipras now faces a formidable challenge as he prepares to force unpopular bailout reforms demanded by eurozone creditors past his own party to get them through parliament.

The 40-year-old former Communist, who stormed to power in January with promises to halt austerity, has the unenviable task of enacting what critics have called the most “humiliating” of Greece’s three bailouts since 2010.

With about a fifth of his radical left Syriza party likely to oppose him, Mr Tsipras will probably need to rely on pro-European opposition MPs to push through measures that will give Greece another dose of austerity. After marathon talks in Brussels, eurozone creditors yesterday gave a green light a three-year rescue worth up to €86 billion (Dh348bn), a €35bn investment package, the promise of additional debt relief and – most urgently – funding for tottering Greek banks.

First, though, Mr Tsipras has to rush through parliament a package of tax hikes, pension reform and fiscal safeguards that are essentially the same as those that Greeks broadly rejected in a July 5 referendum.

Most controversially, Athens has to park state assets worth up to $56bn (Dh205.7bn) in a special fund for them to be privatised. It will be managed by Greece under the supervision of European creditor institutions.

Mr Tsipras said he had fought “a righteous battle” to secure the deal and that that the “great majority of Greek people will support this effort”. But after sacrificing m any election promises to keep the country in the euro, the new premier’s political survival could be at stake.

“This is not what we expected, it’s a programme that won’t avoid recession, a programme of austerity, which nonetheless allows a bit of space for the government to take some initiatives and counteract the bad measures,” said Michalis Spourdalakis, a political science professor at the University of Athens.

“For six months Syriza has been negotiating and not governing. If we are serious about the prospect of democracy we have to give this government a chance and see how far it can go.”

Labour minister Panos Skourletis, a former spokesman for Mr Tsipras, predicted yesterday the government would lose its majority in parliament and have to hold elections later this year.

“There is now an issue of government majority ( in parliament). I see (elections) in 2015, it’s imperative,” he said.

The Iskra website, which echoes the views of Mr Tsipras’s chief party opponent, the eurosceptic energy minister Panagiotis Lafazanis, did not pull its punches either.

“After 17 hours of ‘ negotiations’, the leaders of eurozone states reached a humiliating agreement for Greece and the Greek people,” the website said.

Greece would become a “debt colony” in a “German- supervised EU”, the hardline leftist outlet said.

According to reports, Mr Tsipras is considering reshuffling his cabinet to axe Mr Lafazanis and a few other anti-euro hardliners.

The premier had already taken a beating in parliament on Saturday to get this far.

Of the 149 Syriza legislators, 17 refused to support him in a Saturday vote, which authorised the government to negotiate the bailout. And among those who gave their approval, another 15 Syriza MPs said they would not approve any further reforms demanded by Greece’s creditors.

Mr Tsipras could invoke a code of conduct signed by party legislators that called on them to hand over their votes to the party, in the event of policy disagreement with the government.

But parliament vice-chairman Alexis Mitropoulos said the dissident faction was simply too influential to ignore. “The faction that disagrees is a co-founder of the party and the second-most powerful,” the lawyer said.

“I don’t see these cadres backing down, and they cannot be threatened to resign.”

Mr Tsipras won the authorisation vote with the support of pro-European opposition politicians.

Elsewhere, Greece’s public servants are being called to hold a 24-hour strike tomorrow, the day the parliament is to vote on reforms needed to unlock the eurozone rescue.

Their union, Adedy, said it was against the agreement with the eurozone.