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| Greek parliament approves next phase in bailout reforms | |
| (about 7 hours later) | |
| Greece’s embattled prime minister won a crucial vote on a third bailout programme for the debt-stricken nation early on Thursday, hours after the European Central Bank infused cash-starved Greek banks with further emergency liquidity. | |
| Athens was thrown further emergency assistance when the European Central Bank (ECB) increased liquidity for Greek lenders ahead of the crucial vote on a third bailout programme for the debt-stricken nation. | |
| Hours before the Greek parliament approved reforms set as the price of rescue loans from international creditors, the ECB’s governing council agreed to raise the cap on emergency assistance for the country’s fragile banking system by €900m (£629m) on Wednesday. | |
| The move was immediately received with relief. Greek banks, newly opened after three weeks of enforced closure, have become a weather-vane for normality in a country whose close brush with bankruptcy has kept it on the frontline of Europe’s debt drama. The decision – the second such injection of emergency funds since late June – will allow Greece’s cash machines to keep operating as the tourist season gathers pace, despite the continued imposition of capital controls across the banking sector. The ceiling on funds was previously set at €89.5bn. | The move was immediately received with relief. Greek banks, newly opened after three weeks of enforced closure, have become a weather-vane for normality in a country whose close brush with bankruptcy has kept it on the frontline of Europe’s debt drama. The decision – the second such injection of emergency funds since late June – will allow Greece’s cash machines to keep operating as the tourist season gathers pace, despite the continued imposition of capital controls across the banking sector. The ceiling on funds was previously set at €89.5bn. |
| With Athens’s membership of the eurozone still far from assured, the Greek finance minister, Euclid Tsakalotos, kicked off a raucous debate in the 300-seat parliament imploring MPs to support the bailout plan. The passage of reforms, including a new code of civil procedure that would overhaul Greece’s notoriously slow judicial sector, have been demanded by the EU and the International Monetary Fund in exchange for opening talks on a third rescue package. | With Athens’s membership of the eurozone still far from assured, the Greek finance minister, Euclid Tsakalotos, kicked off a raucous debate in the 300-seat parliament imploring MPs to support the bailout plan. The passage of reforms, including a new code of civil procedure that would overhaul Greece’s notoriously slow judicial sector, have been demanded by the EU and the International Monetary Fund in exchange for opening talks on a third rescue package. |
| Related: Business live: Anti-austerity protest in Athens ahead of bailout vote | Related: Business live: Anti-austerity protest in Athens ahead of bailout vote |
| Tsakalotos told MPs: “It is extremely important to wrap up this procedure of prior actions so that we can start negotiations on Friday.” | Tsakalotos told MPs: “It is extremely important to wrap up this procedure of prior actions so that we can start negotiations on Friday.” |
| A new bailout programme would provide as much as €86bn in loans for Greece, tiding it over for the next three years. But the stringent terms attached to the package have divided the ruling leftwing Syriza party and raised fears of political instability. With at least a third of the governing party vehemently opposed to the measures, and advocating a euro exit and a return to the drachma, the late-night vote was expected to be a test of the authority over Syriza of the prime minister, Alexis Tsipras. | A new bailout programme would provide as much as €86bn in loans for Greece, tiding it over for the next three years. But the stringent terms attached to the package have divided the ruling leftwing Syriza party and raised fears of political instability. With at least a third of the governing party vehemently opposed to the measures, and advocating a euro exit and a return to the drachma, the late-night vote was expected to be a test of the authority over Syriza of the prime minister, Alexis Tsipras. |
| Hardliners, including the flamboyant former finance minister Yanis Varoufakis, have described the policies as unworkable in a country already labouring under record levels of poverty and unemployment. | Hardliners, including the flamboyant former finance minister Yanis Varoufakis, have described the policies as unworkable in a country already labouring under record levels of poverty and unemployment. |
| Costas Isychos, the former deputy defence minister who resigned in outrage over the measures, said: “The coping strategies of a large part of society ran out long ago. The road map foreseen by the accord not only cannot be enforced, I believe large parts of society will fight back.” | Costas Isychos, the former deputy defence minister who resigned in outrage over the measures, said: “The coping strategies of a large part of society ran out long ago. The road map foreseen by the accord not only cannot be enforced, I believe large parts of society will fight back.” |
| Ahead of the ballot, anti-austerity protestors took to the streets, with the civil servants union, ADEDY, and militants from the communist-affiliated PAME organising rallies against reforms denounced as the harbingers of yet more destitution. | Ahead of the ballot, anti-austerity protestors took to the streets, with the civil servants union, ADEDY, and militants from the communist-affiliated PAME organising rallies against reforms denounced as the harbingers of yet more destitution. |
| Insiders said it was essential that Tsipras retained control of the 110 MPs who last week voted in favour of tax rises and pension cuts – measures spurned by the young premier until his spectacular U-turn in the face of possible eurozone ejection on 13 July. | Insiders said it was essential that Tsipras retained control of the 110 MPs who last week voted in favour of tax rises and pension cuts – measures spurned by the young premier until his spectacular U-turn in the face of possible eurozone ejection on 13 July. |
| Related: Chances of Greek bailout rest on MPs' vote | Related: Chances of Greek bailout rest on MPs' vote |
| The controversial policies were passed with the help of “pro-European” opposition parties, including the main centre-right New Democracy, which have argued that Greece must remain at the heart of Europe, and in the eurozone, at any cost. | The controversial policies were passed with the help of “pro-European” opposition parties, including the main centre-right New Democracy, which have argued that Greece must remain at the heart of Europe, and in the eurozone, at any cost. |
| But across the political spectrum, MPs said it was impossible for the government to continue counting on the opposition for support. | But across the political spectrum, MPs said it was impossible for the government to continue counting on the opposition for support. |
| Antigone Limberaki, an MP with the centrist Potami party, said: “Tsipras cannot cohabit with at least a third of his political group and more than half of his central committee totally opposed to the measures [outlined] in the third memorandum. Everything now depends on how he handles the problems in his party. It is very clear that he is burning bridges with the other side, that he feels he is on a one-way track and is going down the road of moderation.” | Antigone Limberaki, an MP with the centrist Potami party, said: “Tsipras cannot cohabit with at least a third of his political group and more than half of his central committee totally opposed to the measures [outlined] in the third memorandum. Everything now depends on how he handles the problems in his party. It is very clear that he is burning bridges with the other side, that he feels he is on a one-way track and is going down the road of moderation.” |
| How Syriza MPs, catapulted into power on the promise of ending austerity, react will determine the political stability so necessary for the Greek economy to return to normality. | How Syriza MPs, catapulted into power on the promise of ending austerity, react will determine the political stability so necessary for the Greek economy to return to normality. |