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German Parliament Approves Deal for Greek Bailout Talks German Parliament Approves Deal for Greek Bailout Talks
(about 4 hours later)
BERLIN — German lawmakers on Friday approved entering into detailed negotiations for a Greek bailout amid a simmering international debate over providing more debt relief to Athens and intensifying questions about whether Greece would be better off leaving the European common currency.BERLIN — German lawmakers on Friday approved entering into detailed negotiations for a Greek bailout amid a simmering international debate over providing more debt relief to Athens and intensifying questions about whether Greece would be better off leaving the European common currency.
The vote was 439 in favor of moving ahead on the bailout deal negotiated by European leaders last weekend in Brussels. There were 119 votes against, and 40 legislators abstained. With resistance to providing more help to Greece growing among conservatives, 439 lawmakers voted in favor of moving ahead with the bailout deal European leaders negotiated last weekend in Brussels. There were 119 votes against, and 40 legislators abstained.
Chancellor Angela Merkel and her finance minister, Wolfgang Schäuble, had urged Parliament during a debate before the vote to back the bailout, which both called “a last attempt” to order Greece’s finances and build a functioning state. It would be Greece’s third bailout in five years, and it was negotiated with the goal of keeping the country in the eurozone. Chancellor Angela Merkel and her finance minister, Wolfgang Schäuble, had urged Parliament to back the bailout, which both called “a last attempt” to order Greece’s finances and build a functioning state. It would be Greece’s third bailout in five years, and it was negotiated with the goal of keeping the country in the eurozone.
The chancellor, who turned 61 on Friday, had used her statement to review the past six months, in which Greece’s situation deteriorated rapidly. By the time European leaders gathered last weekend in Brussels for a marathon session that ended with an agreement to demand strict conditions of Greece before providing it with new aid, it was not just Greece’s fate at stake, she said. But a breakdown of the vote showed that 60 members of Ms. Merkel’s conservative bloc voted against starting talks on a new package, that five abstained and that four did not vote. The size of that opposition was double the size in February, when Parliament had last voted on Greek debt relief. At the time, 29 deputies opposed the measure and three abstained.
The chancellor, who turned 61 on Friday, used her statement to review the past six months, in which Greece’s situation deteriorated rapidly. By the time European leaders gathered last weekend in Brussels for a marathon session that ended with an agreement to demand strict conditions of Greece before providing it with new aid, it was not just Greece’s fate at stake, she said.
“The alternative to this agreement would not have been an orderly exit from the euro, one that Greece wanted and was drawn up by everybody, but predictable chaos,” Ms. Merkel said.“The alternative to this agreement would not have been an orderly exit from the euro, one that Greece wanted and was drawn up by everybody, but predictable chaos,” Ms. Merkel said.
She acknowledged that many within her conservative bloc were not convinced that the program would suffice to stabilize Greece enough that it could afford to repay its public debt of more than 300 billion euros, or about $330 billion. But for the sake of the Greek people, of Germany and of European unity, she said, it must be tried. Separately on Friday, the European Union agreed to provide Athens with a short-term loan of 7.16 billion euros, or about $7.8 billion, to prevent it from defaulting on earlier loans that it is to repay by Monday.
Another default, including €4.25 billion owed to the European Central Bank, would have dashed Greece’s hope of reopening its banks, which have been closed since June 29, and of restoring some stability to its crumbling finances.
Valdis Dombrovskis, a vice president of the European Commission responsible for the euro, said the short-term loan approved by all 28 countries in the European Union “saves Greece from immediate default” and displayed “European solidarity in action” after months of acrimonious negotiations.
Greece also won tentative support on Friday from the European Stability Mechanism, the eurozone rescue fund in Luxembourg that is expected to issue new loans to Greece as part of a long-term program. The group said in a statement on Friday that its governors had endorsed a new program in principle and that aid would be contingent on a final agreement between Greece and its eurozone creditors.
In Athens, Prime Minister Alexis Tsipras continued addressing the repercussions of a parliamentary vote on Wednesday on the new austerity legislation Greece’s creditors have demanded, and the fact that 39 members of his leftist Syriza party refused to support it.
Meeting with Syriza lawmakers, and focusing particularly on the 32 who voted against the measures — six abstained and one was not present for the vote — he said the split was “an open wound in our party at a critical time.”
He continued: “Personally, I cannot allow anyone, after what I’ve been through in the past six months, to think they have a stronger conscience dilemma than I do, towards our common principles, values, views and ideological references”
Mr. Tsipras said he planned to remain prime minister, even with a minority government. But Panos Kammenos, Mr. Tsipras’s defense minister and the leader of his coalition partner, the Independent Greeks, said on television on Friday, “Either the 32 deputies will make up their minds, or we will go to elections.”
In making her case to the German Parliament on Friday, Ms. Merkel acknowledged conservative doubts that the program would suffice to stabilize Greece enough that it could afford to repay its public debt of more than 300 billion euros, or about $330 billion. But for the sake of the Greek people, of Germany and of European unity, she said, it must be tried.
“We would be grossly negligent, even irresponsible, if we did not at least try this path,” Ms. Merkel said.“We would be grossly negligent, even irresponsible, if we did not at least try this path,” Ms. Merkel said.
But her government’s commitment to the bailout plan was called into question on Thursday, when Mr. Schäuble suggested that Greece’s best opportunity for a debt reduction of the scale that it wants and needs would come only if it left the eurozone for some time. He made his statement just hours after the Greek Parliament had lived up to its initial commitment under the deal, passing a new set of austerity measures the creditors had demanded, over the objections of the leftist Syriza party of Prime Minister Alexis Tsipras. Her government’s commitment to the bailout plan was called into question on Thursday, when Mr. Schäuble suggested that Greece’s best opportunity for a debt reduction of the scale that it wants and needs would come only if it left the eurozone for some time. He made his statement just hours after the Greek Parliament had lived up to its initial commitment under the deal, passing a new set of austerity measures the creditors had demanded, over the objections of the leftist Syriza party of Prime Minister Alexis Tsipras.
In the parliamentary debate on Friday, Mr. Schäuble did not repeat his suggestion that Greece might be better off leaving the eurozone. But in a fiery address, he emphasized that the negotiations on a third bailout were “a last attempt to solve the extraordinarily difficult task” of restoring lasting financial stability to Greece.In the parliamentary debate on Friday, Mr. Schäuble did not repeat his suggestion that Greece might be better off leaving the eurozone. But in a fiery address, he emphasized that the negotiations on a third bailout were “a last attempt to solve the extraordinarily difficult task” of restoring lasting financial stability to Greece.
“I ask you all to agree to this proposal,” said Mr. Schäuble, a senior member of Ms. Merkel’s center-right Christian Democrats. “We believe that we can bring these talks to a successful conclusion.” “I ask you all to agree to this proposal,” said Mr. Schäuble, a senior member of Ms. Merkel’s center-right Christian Democrats, who was applauded for nearly a minute when Ms. Merkel thanked him for his work. “We believe that we can bring these talks to a successful conclusion.”
The debate over whether to back a third bailout for Greece has divided Germans, and many fear they are throwing money into a black hole. An opinion poll for the German broadcaster ARD showed that 49 percent of those surveyed wanted their lawmakers to vote against the next round of negotiations, while 46 percent urged Parliament to support it. The poll of 1,029 people was conducted by Infratest Dimap from Monday to Wednesday.The debate over whether to back a third bailout for Greece has divided Germans, and many fear they are throwing money into a black hole. An opinion poll for the German broadcaster ARD showed that 49 percent of those surveyed wanted their lawmakers to vote against the next round of negotiations, while 46 percent urged Parliament to support it. The poll of 1,029 people was conducted by Infratest Dimap from Monday to Wednesday.
The German newspaper Bild, which has lobbied over the past six months against further support for Greece, published letters from readers on Thursday urging the chancellor to reject the package.The German newspaper Bild, which has lobbied over the past six months against further support for Greece, published letters from readers on Thursday urging the chancellor to reject the package.
“Today Angela Merkel is saving Greece, tomorrow the world, and the day after tomorrow, the universe,” wrote Holger Burba, a reader from Lower Saxony. “And who will save the German people and taxpayers from her?”“Today Angela Merkel is saving Greece, tomorrow the world, and the day after tomorrow, the universe,” wrote Holger Burba, a reader from Lower Saxony. “And who will save the German people and taxpayers from her?”
The terms of the bailout proposal have drawn considerable criticism of Germany from other European nations as well as among left-leaning politicians in Germany itself. Even with German approval of the bailout negotiations and with Greece moving ahead with the required changes, there is still some question about whether the bailout package will come together because of a divide over how much debt reduction should accompany the aid.The terms of the bailout proposal have drawn considerable criticism of Germany from other European nations as well as among left-leaning politicians in Germany itself. Even with German approval of the bailout negotiations and with Greece moving ahead with the required changes, there is still some question about whether the bailout package will come together because of a divide over how much debt reduction should accompany the aid.
Germany has ruled out forgiving any of Greece’s debt, but it has left open the door to negotiations on an extension to the payment schedule or lower interest rates. The International Monetary Fund is insisting, though, that Germany and other European creditors agree to a much deeper debt reduction than they had so far considered.Germany has ruled out forgiving any of Greece’s debt, but it has left open the door to negotiations on an extension to the payment schedule or lower interest rates. The International Monetary Fund is insisting, though, that Germany and other European creditors agree to a much deeper debt reduction than they had so far considered.
Christine Lagarde, managing director of the fund, said in an interview with Europe 1 radio on Friday that the Greek bailout plan was “categorically not” viable without debt relief.Christine Lagarde, managing director of the fund, said in an interview with Europe 1 radio on Friday that the Greek bailout plan was “categorically not” viable without debt relief.
The creditors are in agreement on that principle, she said, but “not on the amount or the means” of easing the repayment burden. Ms. Lagarde excluded debt forgiveness — known in financial jargon as a haircut — but mentioned the possibility of “considerably extending” maturities and the grace period during which no repayment is required, and of reducing the interest rate.The creditors are in agreement on that principle, she said, but “not on the amount or the means” of easing the repayment burden. Ms. Lagarde excluded debt forgiveness — known in financial jargon as a haircut — but mentioned the possibility of “considerably extending” maturities and the grace period during which no repayment is required, and of reducing the interest rate.
For the I.M.F. to participate in a third bailout plan, she said, “there has to be a complete program,” which means not only that Greece must put overhauls in place, but also that the creditors must restructure the debt.For the I.M.F. to participate in a third bailout plan, she said, “there has to be a complete program,” which means not only that Greece must put overhauls in place, but also that the creditors must restructure the debt.
But as Mr. Schäuble’s continued efforts to raise the prospect of Greece leaving the eurozone showed, there is considerable sentiment among conservatives in Germany that their country is already being too generous and that the eurozone might be better off if Athens pulled out of the common currency rather than getting another bailout. The United States, which in recent weeks has watched anxiously as the 19-nation eurozone teetered on either excluding Greece or pressing Athens to leave voluntarily, seems to favor restructuring. “If you look at the I.M.F. paper, it leaves paths open without haircuts,” a senior United States Treasury official said on Thursday, referring to the fund’s most recent publication on Greece this week.
In a test ballot at a five-hour meeting late Thursday of the 311-member conservative bloc, 48 lawmakers voted against opening negotiations with Greece and three abstained, according to Reuters, which cited participants in the meeting. Treasury Secretary Jacob J. Lew was in Berlin and Paris this week for talks with Mr. Schäuble, among others.
Mr. Schäuble’s comments on Thursday brought some rebukes from lawmakers who objected to putting the possibility of a fracture in the eurozone back on the table. Sigmar Gabriel, Ms. Merkel’s deputy and economy minister, drew resounding applause when he said that there could be no more talk of Greece leaving the euro. Austria’s Parliament also voted on Friday to move ahead on the Greece plan.
Among the many uncertainties surrounding the negotiations is how long it will take to reach new bailout terms. It is also unclear how negotiators will measure Greek compliance with what German politicians — and others elsewhere in Europe — have insisted will be strict monitoring.
As Mr. Schäuble’s continued efforts to raise the prospect of Greece leaving the eurozone showed, there is considerable sentiment among conservatives in Germany that their country is already being too generous and that the eurozone might be better off if Athens pulled out of the common currency rather than getting another bailout.
Volker Kauder, the leader in Parliament for Ms. Merkel’s conservative bloc, repeatedly praised Mr. Schäuble for his strategy and conduct of talks. The two men have both served their party for decades and represent the pro-European conservative bent of former West Germany.
“One thing is clear, it is not about making Greece an offer, but it is a question of holding this Europe together,” Mr. Kauder said. He recalled when Greece was admitted to the eurozone in 2001, and said that in retrospect it was “a decisive mistake” to turn a blind eye to the fact the country did not meet the conditions, he said.
“In the future,” said another conservative deputy, Gunther Kriechbaum, “Athens must first deliver.”
But members of the Left and Greens parties in the opposition echoed criticism that Berlin wished to punish the Greeks and seemed to have forgotten that post-World War II Germany itself benefited from generous debt relief.
Sigmar Gabriel, Ms. Merkel’s deputy and economy minister, and leader of the center-left Social Democrats in Ms. Merkel’s coalition, drew resounding applause when he said that there could be no more talk of Greece leaving the euro.
“Every debate about a ‘Grexit’ must be consigned to the past,” Mr. Gabriel said.“Every debate about a ‘Grexit’ must be consigned to the past,” Mr. Gabriel said.
Mr. Gabriel, who leads the center-left Social Democrats in Ms. Merkel’s coalition, conjured a vision of north-south and east-west splits, and other rifts, “that would have Europe into a much deeper crisis than just a financial one” if lawmakers failed to support the third bailout. Mr. Gabriel conjured a vision of north-south and east-west splits, and other rifts, “that would have Europe into a much deeper crisis than just a financial one” if lawmakers failed to support the third bailout.
He added that the biggest challenge for Greece and its people was to build a functioning government and administrative system. He condemned what he called corruption, clientelism and tax evasion in Greece, and called on European governments not to let wealthy Greeks who have bought property in Amsterdam, London or Paris to shirk their responsibilities to their homeland. He added that the biggest challenge for Greece and its people was to build a functioning government and administrative system. He condemned what he called corruption, cronyism and tax evasion in Greece, and called on European governments not to let wealthy Greeks who have bought property in Berlin, London or Paris shirk their responsibilities to their homeland.