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Greece debt crisis: Alexis Tsipras warns of 'minefield' of negotiations after parliament supports new bail-out package despite rebellion
(about 9 hours later)
The Greek parliament has backed the Syriza-led government's proposals as the basis for negotiations with the country's creditors in its attempt to secure a third bailout.
The Greek Prime Minister has said his country is facing a “minefield” of debt negotiations and austerity after parliament backed a package of economic reforms to secure a new bailout.
In a speech delivered after midnight and with strong personal overtones, Prime Minister Alexis Tsipras sought to persuade lawmakers, including dissenters within his own left-wing Syriza party, to back the proposals and grant his finance minister the authorisation to use them as a basis for negotiations with creditors over the weekend.
Alexis Tsipras won cross-party support for a vote late on Friday night but some members of his own left-wing Syriza party, which was elected largely for its anti-austerity stance, rebelled.
Several government politicians stayed away, abstained or voted against reform proposal
Greek finance ministers will meet their Eurogroup counterparts later today in Brussels to decide on the request for assistance from the European Stability Mechanism bailout fund and a full meeting of leaders followed by an EU summit is scheduled for tomorrow. Protesters from the Communist-affiliated trade union PAME attend an anti-austerity rally in central Athens
Mr Tsipras said his government had made mistakes during his six-month tenure but said he had negotiated as hard as he could.
If a deal is not struck, Greek banks could run out of money and the country could be forced to leave the Euro.
"There is no doubt that for six months now we've been in a war," he said, adding that his government had fought "difficult battles" and had lost some of them.
Banks are already closed, with a €60 (£43) daily limit imposed on cash machine withdrawals that has been in place since 28 June, and anti-austerity protesters gathered outside Parliament as last night’s vote was taken.
"Now I have the feeling we've reached the demarcated line. From here on there is a minefield, and I don't have the right to dismiss this or hide it from the Greek people," he said.
Mr Tsipras said his government had made mistakes during its six-month tenure but insisted the latest proposal contains measures that would help the economy and, if approved, unlock sufficient financing for the country to end its its crisis and tackle its massive debt.
But he insisted the latest proposal contains measures that would help the economy and, if approved by Greece's creditors, would unlock sufficient financing for the country to emerge from its protracted crisis and see its massive debt tackled.
“There is no doubt that for six months now we've been in a war,” the Prime Minister said, adding that his government had lost some “difficult battles”.
The proposed measures, including tax hikes and cuts in pension spending, are certain to inflict more pain on a Greek public who just days ago voted overwhelmingly against a similar plan.
“Now I have the feeling we've reached the boundary line,” he added. “From here on there is a minefield, and I don't have the right to dismiss this or hide it from the Greek people.” Pensioners stand outside a closed branch of the Greek National bank in Thessaloniki on June 29
But the new proposal, if approved by Greece's international creditors, will provide longer-term financial support for a nation that has endured six years of recession.
Sparking concerns over the stability of the embattled Greek government, 10 members abstained or voted against the reforms, including energy minister Panagiotis Lafazanis, deputy labour minister Dimitris Stratoulis and the speaker of parliament, Zoe Constantopoulou.
If approved, Greece would in turn get a three-year loan package worth nearly 53.5 billion euro (£38.5 billion) as well as some form of debt relief.
"The government is being totally blackmailed to acquiesce to something which does not reflect what it represents," Ms Constantopoulou said.
That is far more than the 7.2 billion euro (£5.2 billion) left over from Greece's previous bailout that had been at stake in the country's five-month negotiations until last month.
The former finance minister, Yanis Varoufakis, was among seven more Syriza MPs who were absent for the vote, putting the government’s majority in jeopardy.
Greek defence minister Panos Kammenos, who heads the government's junior coalition member Independent Greeks, said he was advocating a vote in favour of the proposal even though it goes against his party's principles. The party holds 13 seats in the 300-member parliament.
Panos Kammenos, the defence minister who heads the government's junior coalition member Independent Greeks, said he supported the proposal, even though it goes against his party's principles, and feared that failing to secure a deal with creditors could cause civil unrest.
"I want to state clearly, I am not afraid of Grexit," he said, referring to the possibility of Greece leaving the euro. "I am afraid of one thing: national division and civil war."
"I want to state clearly, I am not afraid of Grexit," he added. "I am afraid of one thing: national division and civil war."
He said he feared failure to get a deal with creditors would eventually lead to civil strife.
Only 32 MPs voted “no” to the package, with 251 supporting it, but several politicians spoke out against the tax rises and spending cuts being approved just days after similar measures were rejected by Greek voters in a referendum.
Greece's latest proposal was sent to rescue creditors who are to meet this weekend to decide whether to approve it. The country has relied on bailout funding since losing access to financing from bond markets in 2010.
The proposals request €53.5 billion ($59.47 billion) to cover Greece's debts until 2018 in the country’s third bailout.
The new measures overturn many of the election promises of Mr Tsipras' left-wing Syriza party, which had vowed to overturn bailout austerity, and come less than a week after 61 per cent of voters opposed similar reforms, proposed by creditors, in last Sunday's referendum.
The European Commission, European Central Bank and International Monetary Fund have indicated early approval by telling eurozone governments they are a basis for negotiation “under certain conditions”, following a joint assessment.
Greece's major creditors - the International Monetary Fund (IMF), the European Central Bank and other eurozone nations - were already fine-combing through the proposals before sending them to the other 18 eurozone finance ministers on Saturday.
"The priority now is to have a positive outcome to the negotiations,“ Mr Tsipras said in a statement after the vote. ”Everything else in its own time."
A summit of the full 28-nation European Union in Brussels will consider them on Sunday, with hopes for a deal before midnight.
The package would bring in 23 per cent unified VAT, scrap tax breaks for wealthy islands, hike taxes for shipping companies, phase out a “solidarity grant” for pensioners, privatise ports and telecoms and slash defence spending.
French president Francois Hollande described the measures as "serious and credible", though Germany refused to be drawn on their merits.
French President Francois Hollande described the measures as "serious and credible" but ministers from Germany, which has contributed more to bailouts than any other country, sounded wary and ruled out any debt restructuring that would lower its real value.
France's Socialist government has been among Greece's few allies in the eurozone during the past months of tough negotiations, with Germany taking a far harder line.
Any deal would also have to be endorsed by national parliaments in the Eurozone, which must also formally approve the loan negotiations being started.
Jeroen Dijsselbloem, the Dutch finance minister who chairs the meetings of the eurozone finance ministers known as the eurogroup, said the proposals were "extensive" but would not say whether he considered them sufficient.
The country has received two bailouts worth €240 billion from the EU and IMF since 2010 but its economy has shrunk by a quarter and unemployment is topping 25 per cent.
As the government inched closer to a deal to ensure Greece is not jettisoned out of Europe's joint currency, some Greeks were furious at the proposed measures.
Additional reporting by agencies
"If this is Europe, then we don't want this Europe," said Aristidis Dimoupulos, a marketing professor in Athens. "If this is the eurozone, we don't care if we go out or in. If in this life we'll be slaves, it's better to be dead."
Meanwhile, banks remained closed since the start of last week and cash withdrawals were restricted to 60 euro (£43) per day.
Although credit and debit cards work within the country, many businesses refuse to accept them, insisting on cash-only payments. All money transfers abroad, including bill payments, were banned without special permission.
Alternate finance minister Dimitris Mardas said the banks would be gradually restored to operation. They are set to remain closed through at least Monday.
Experts said it is unlikely, even in the event of a deal, that limits on cash withdrawals and transfers will be lifted completely for some time.
