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Greek lawmakers debate third bailout deal

Alexis Tsipras SyrizaLawmakers in Greece began Thursday debating a third international bailout, ahead of a vote on the 85-billion-euro ($94.8-billion) rescue package, on which eurozone finance ministers are to give their verdict Friday.

“The timetable is tight so we are forced into this emergency procedure,” Gerasimos Balaouras, a lawmaker from the leftist Syriza party of Prime Minister Alexis Tsipras said, kickstarting the debate in parliamentary committees.

Balaouras reminded parliamentarians that Athens had to repay 3.4 billion euros owed to the European Central Bank by August 20 — and that by adopting the European-International Monetary Fund bailout hoped to unlock default-saving funds on time.

From the committees, the debate will move to a full parliamentary session Thursday evening, with a vote expected during the night.

Better-than-expected growth figures released Thursday gave Tsipras a boost going into the ballot.

National statistics agency estimates showed the economy expanding 0.8 percent in the second quarter of 2015 — when debt-laden Greece came dangerously close to crashing out of the eurozone — compared with the first three months of the year, when it posted zero growth.

Previous estimates by the agency had shown the economy shrinking 0.2 percent in the first quarter, and EU source predict it will tumble back into recession this year.

During the last two votes on reforms demanded by creditors in exchange for another cash injection, dozens of Syriza lawmakers mutinied, leaving Tsipras relying on the opposition to push through more of the austerity he once vowed vowed to dump.

– Eurozone verdict awaited –

After weeks of talks, Greece and its creditors reached a technical agreement on the new bailout on Tuesday, but the deal has yet to be approved by eurozone members.

Eurozone finance ministers will meet Friday in Brussels to give their verdict on the 400-page document.

Tsipras has expressed confidence the new plan will carry the day, both in Athens and in other European capitals.

“I am and remain confident that we will succeed in reaching a deal and loan support… that will end economic uncertainty,” he said.

Berlin, however, has urged caution.

“We have formulated questions,” Germany’s finance ministry said in a statement Wednesday. “These are part of the review process which is not yet completed.”

German newspaper Bild cited a two-page finance ministry document that raised questions about Greece’s debt sustainability, privatisations and the role of the IMF, among other matters.

Finnish Finance Minister Alexander Stubb — whose country is also a firm believer in the economic healing properties of austerity — has also sounded a cautious note on the deal.

– Recession forecasts –

An EU source said it was unclear if the bailout would be finalised by the August 20 deadline for the ECB repayment — leaving open the possibility that Athens might need a few days of emergency funding.

“In that case, we need all the member states” to approve such a loan, the source added, in what could pose a fresh headache for negotiators.

In contrast with Thursday’s figures from Athens, EU sources had this week forecast Greece would sink back into a deep recession this year.

The Greek economy, which crawled out of a six-year recession only in 2014, will shrink 2.3 percent in 2015 and 1.3 percent in 2016 before growing again by 2.7 percent in 2017 and 3.1 percent in 2018, they said.

Greece has repeatedly complained that the austerity measures demanded by the EU, the ECB and IMF in return for two previous bailouts have only hurt an economy that has contracted by a quarter since the crisis erupted.

Syriza hardliners say the new accord goes against campaign pledges made by the hard left party, which came to power on an anti-austerity ticket in January.

The latest rescue package calls for a gas market overhaul, ends most early retirement schemes, eliminates fuel price benefits for farmers and raises some taxes, among other measures.

The government said Greek banks — which were forced to shut down for three weeks as panicked customers withdrew billions of euros — would immediately receive 10 billion euros from the package, and be fully recapitalised by the end of the year.



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