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Greece bailout: Merkel faces test as German MPs vote on deal Greece bailout: Merkel faces test as German MPs vote on deal
(about 4 hours later)
A majority of German MPs are expected to vote in favour of the controversial third Greek bailout later on Wednesday. German MPs are meeting to debate and vote on a controversial third bailout deal for Greece.
But the vote threatens to be overshadowed by an expected rebellion in Chancellor Angela Merkel's centre-right alliance. A majority is expected to approve the bailout, but Chancellor Angela Merkel is bracing for a rebellion in her centre-right alliance.
The Christian Democrats (CDU) and their Bavarian CSU allies are divided over the €86bn ($95bn; £61bn) package.The Christian Democrats (CDU) and their Bavarian CSU allies are divided over the €86bn ($95bn; £61bn) package.
The vote in parliament will follow a debate scheduled to start at 09:00 (07:00 GMT). The rebellion in the Bundestag (lower house) could rise to 100 - out of 631 - MPs, German commentators say.
Last month, 65 CDU/CSU politicians refused to support even starting negotiations for a third bailout.
Some MPs suspect that the deal could lead to part of Greece's large debt being written off - with EU taxpayers having to foot the bill.Some MPs suspect that the deal could lead to part of Greece's large debt being written off - with EU taxpayers having to foot the bill.
The rebellion in the Bundestag (lower house) could rise to 100 MPs, German commentators say - a third of the total in Mrs Merkel's bloc. Conservative MP Dagmar Woehrl vowed to vote against the package, saying: "If we're honest, this is a hidden debt haircut (write-down) at the expense of our children and grandchildren."
Last month 65 CDU/CSU politicians refused to support even starting negotiations for a third bailout. But CDU General Secretary Peter Tauber warned a vote against the deal was "tantamount to stabbing the chancellor in the back".
IMF assurancesIMF assurances
A majority is still expected to pass the deal, as the Social Democrats (SPD) and Greens want it to go ahead - but such a rebellion could weaken Ms Merkel's authority nationally. Finance Minister Wolfgang Schaeuble was first to speak on Wednesday, urging the Bundestag to vote for the deal, saying the most important thing was to encourage growth in the Greek economy so that it could stand on its own again.
Mrs Merkel's "grand coalition" holds 504 seats in the Bundestag, enough to withstand the rebellion, and the Social Democrats (SPD) and Greens want the bailout to go ahead.
However, the rebellion could weaken Ms Merkel's authority nationally.
Many MPs want assurances that the International Monetary Fund will contribute to the bailout - but the IMF is avoiding any commitment until Greece's progress is assessed in October.Many MPs want assurances that the International Monetary Fund will contribute to the bailout - but the IMF is avoiding any commitment until Greece's progress is assessed in October.
Finance Minister Wolfgang Schaeuble has described the IMF's role as "indispensable". A number of parliaments in the eurozone, including Germany, are required to approve the deal with a vote. German MPs had to be recalled from their summer break.
He is expected to speak for the government during the debate on Wednesday, with Ms Merkel taking a backseat. On Tuesday, MPs in Austria, Estonia and Spain backed the bailout.
Mr Schaeuble says he backs the new deal despite earlier putting forward a plan for Greece to take a "time out" from the euro to stabilise its precarious finances. But doubts remain about the Greek government's commitment to the bailout conditions because it previously pledged to oppose austerity.
On Tuesday, the parliaments of Austria, Estonia and Spain voted to approve the bailout. Many MPs of the ruling Syriza party believe Prime Minister Alexis Tsipras allowed the eurozone lenders to dictate unacceptable terms to Greece, violating the country's sovereignty.
But doubts remain about the Syriza government's commitment to the bailout conditions because it previously pledged to oppose austerity.
Many Syriza MPs believe Prime Minister Alexis Tsipras allowed the eurozone lenders to dictate unacceptable terms to Greece, violating the country's sovereignty.
On Tuesday, the Greek government said it had agreed the sale of 14 regional airports to German transport company Fraport Slentel for €1.23bn.On Tuesday, the Greek government said it had agreed the sale of 14 regional airports to German transport company Fraport Slentel for €1.23bn.
It is the first privatisation measure to be implemented by the leftist Syriza party since it took office in January.It is the first privatisation measure to be implemented by the leftist Syriza party since it took office in January.
In exchange for the bailout - and keeping Greece in the euro - Mr Tsipras agreed to further painful state sector cuts, including far-reaching pension reforms.In exchange for the bailout - and keeping Greece in the euro - Mr Tsipras agreed to further painful state sector cuts, including far-reaching pension reforms.
The new loans will be spread over the next three years. The first tranche will be €26bn - €10bn to recapitalise Greek banks and €16bn in several instalments, the first of which - €13bn - will be made by 20 August, when Greece must repay about €3.2bn to the European Central Bank (ECB).The new loans will be spread over the next three years. The first tranche will be €26bn - €10bn to recapitalise Greek banks and €16bn in several instalments, the first of which - €13bn - will be made by 20 August, when Greece must repay about €3.2bn to the European Central Bank (ECB).