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Greek debt crisis: vote clears way for bailout talks Greek debt crisis: vote clears way for bailout talks
(about 2 hours later)
Greece is ready to begin formal talks with its creditors on a proposed €86bn (£60bn) bailout, after MPs voted for reforms demanded by creditors. Greece is ready to begin formal talks on a proposed €86bn (£60bn) bailout after MPs voted for reforms demanded by its creditors.
At a late-night vote in the Greek parliament, 230 MPs backed a package of reforms, while 63 voted against. The prime minister Alexis Tsipras, who is under growing pressure to call early elections, managed to contain the rebellion in his own ranks. A total of 36 Syriza MP voted against or abstained on the measures, three fewer than at a similar vote last week. At a late-night vote in the Greek parliament, 230 MPs backed a package of reforms, while 63 voted against. The prime minister, Alexis Tsipras, who is under growing pressure to call early elections, managed to contain the rebellion in his own ranks. A total of 36 Syriza MPs voted against or abstained on the measures, three fewer than at a similar vote last week.
The outline agreement on launching talks for a third bailout included transferring up to €50bn worth of state-owned assets to a privatisation fund, reforms to pensions, an overhaul of the VAT code and the imposition of “quasi-automatic” spending cuts if the government fails to meet targets for a primary surplus - or the amount that tax income exceeds spending. The outline agreement on launching talks for a third bailout included transferring up to €50bn worth of state-owned assets to a privatisation fund, reforms to pensions, an overhaul of the VAT code and the imposition of “quasi-automatic” spending cuts if the government fails to meet targets for a primary surplus – the amount that tax income exceeds spending.
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The former finance minister, Yanis Varoufakis, voted for the measures, having opposed the first round of reforms that included pension cuts and VAT increases in a vote the previous week. The former finance minister, Yanis Varoufakis, voted for the measures after opposing the first round of reforms that included pension cuts and VAT increases in a vote the previous week.
In this case, Varoufakis said, the specific measures being voted on included reforms he had previously put forward himself. In this case, Varoufakis said, the specific measures being voted on included reforms he had put forward himself.
MPs had less than a day to consider around 900 pages of legislation, covering a sweeping reform to Greece’s civil justice courts and new rules to deal with failing banks. MPs had less than a day to consider about 900 pages of legislation, covering a sweeping reform to Greece’s civil justice courts and new rules to deal with failing banks.
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In an appeal to parliament to back the reforms, Tsipras reiterated his message that he disliked the bailout plan, but said there was no other choice if Greece wanted to avoid bankruptcy. In an appeal to parliament to back the reforms, Tsipras reiterated that he disliked the bailout plan but said there was no other choice if Greece wanted to avoid bankruptcy. “We chose a difficult compromise to avert the most extreme plans by the most extreme circles in Europe,” he said.
“We chose a difficult compromise to avert the most extreme plans by the most extreme circles in Europe.” The vote means that Greece and its creditors – the European commission, European Central Bank and the International Monetary Fund – can begin formal negotiations on a three-year bailout plan, although talks have been going on behind the scenes for several days. Both sides hope to reach an agreement by 20 August, when the Greek government faces a critical debt repayment deadline.
The vote means that Greece and its creditors - the European Commission, European Central Bank and the International Monetary Fund - can now begin formal negotiations on a three-year bailout plan, although talks have already been going on behind the scenes for several days. Both sides hope to reach an agreement by 20 August, when the Greek government faces a critical debt repayment deadline.
The re-starting of talks heralds the return to Athens of representatives from Greece’s three creditor institutions, otherwise known as the troika.The re-starting of talks heralds the return to Athens of representatives from Greece’s three creditor institutions, otherwise known as the troika.
In the run-up to his election in January, Tsipras pledged to expel the troika from Greece, but is now forced to open the doors of Greek ministries to its inspectors. In the runup to his election in January, Tsipras had pledged to expel the troika from Greece. Now he is forced to open the doors of Greek ministries to its inspectors.
Manos Giakoumis, head analyst at Macropolis, which provides analysis on Greek politics and economics, said public reaction to the return of the troika would depend on media coverage: “It could be a negative development for the government but it is an expected development,” he said. Manos Giakoumis, head analyst at MacroPolis, which provides analysis on Greek politics and economics, said public reaction to the return of the troika would depend on media coverage. “It could be a negative development for the government but it is an expected development,” he said.
Currently, there were no easy answers when trying to assess Greek public opinion, he said. “It is also not clear what will be the reaction of Syriza taxpayers or pensioners [to tax increases and pension cuts]... and the same also applies to the return of the troika, it depends on how the government will communicate it.” There were no easy answers when trying to assess Greek public opinion, he said. “It is also not clear what will be the reaction of Syriza taxpayers or pensioners [to tax increases and pension cuts],” he said. “And the same also applies to the return of the troika, it depends on how the government will communicate it.”