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| Greek rescue package expected to pass through parliament | Greek rescue package expected to pass through parliament |
| (about 5 hours later) | |
| Greece’s parliament is meeting in emergency session on Thursday to ratify a new bailout deal, but it is unclear whether the multibillion-euro agreement had the vital backing of Germany. | |
| Despite rebellion in the ranks of Prime Minister Alexis Tsipras’s leftist Syriza party, the 400-page text is thought likely to pass through the Athens legislature with the support of opposition parties in a vote not expected until the early hours of Friday. | |
| Related: Greek economy posts surprise recovery ahead of bailout vote – live | |
| But the rescue package, worth up to €85bn (£60bn) over three years and urgently needed to prevent the debt-stricken country defaulting and to keep it in the euro, must still be approved by the other eurozone member states at a meeting of finance ministers in Brussels on Friday afternoon. | But the rescue package, worth up to €85bn (£60bn) over three years and urgently needed to prevent the debt-stricken country defaulting and to keep it in the euro, must still be approved by the other eurozone member states at a meeting of finance ministers in Brussels on Friday afternoon. |
| The deal, which surrenders powers over huge areas of economic and social policymaking to Greece’s international creditors, also has to be ratified by a number of national parliaments, including Germany’s – a process Athens wants completed in time for it to make a major €3.2bn payment to the European Central Bank on 20 August. | The deal, which surrenders powers over huge areas of economic and social policymaking to Greece’s international creditors, also has to be ratified by a number of national parliaments, including Germany’s – a process Athens wants completed in time for it to make a major €3.2bn payment to the European Central Bank on 20 August. |
| Tsipras insisted on Wednesday he was “confident that we will succeed in reaching a deal and loan support … that will finally end economic uncertainty”. However, Berlin has so far withheld approval of the draft rescue plan, which includes an immediate €10bn cash injection for Greece’s ailing banks, signalling repeatedly that it does not want to be rushed. | |
| The German finance ministry said it had “questions” about the package and suggested Berlin may yet push for bridge financing to allow Athens to meet its ECB payment rather than ratify Greece’s third full-blown bailout in five years. | The German finance ministry said it had “questions” about the package and suggested Berlin may yet push for bridge financing to allow Athens to meet its ECB payment rather than ratify Greece’s third full-blown bailout in five years. |
| “Bridge financing is not off the table,” finance ministry spokesman Jürg Weißgerber said on Wednesday. “We’re still taking bridge financing into consideration if it’s not possible to pay out a first tranche in August to meet the outstanding obligations.” | “Bridge financing is not off the table,” finance ministry spokesman Jürg Weißgerber said on Wednesday. “We’re still taking bridge financing into consideration if it’s not possible to pay out a first tranche in August to meet the outstanding obligations.” |
| Internal German government documents seen by the Guardian revealed several major objections to the draft package, including questions about Greece’s debt sustainability, the International Monetary Fund’s support for the deal, and delays in planned privatisations. | Internal German government documents seen by the Guardian revealed several major objections to the draft package, including questions about Greece’s debt sustainability, the International Monetary Fund’s support for the deal, and delays in planned privatisations. |
| The agreement, which will entail 57 separate measures contained in 40 pieces of legislation to be voted on by Greek MPs, foresees a radical overhaul of the Greek economy and stipulates major reforms of health, welfare, pensions and taxation systems. | The agreement, which will entail 57 separate measures contained in 40 pieces of legislation to be voted on by Greek MPs, foresees a radical overhaul of the Greek economy and stipulates major reforms of health, welfare, pensions and taxation systems. |
| It also establishes a system of quarterly reviews of the reforms’ progress by the European commission, ECB and IMF. By the time of the first review in October, Greece will have had to deliver its 2016 budget, a supplementary budget for this year, and a full three-year fiscal strategy. | |
| Acceptance of the draconian terms represents a policy U-turn for Tsipras and for Syriza, which won Greece’s January general election pledging to end the punishing austerity programmes that since 2010 have left the country in deep recession, with 26% of the workforce unemployed and GDP shrunk by a quarter. | Acceptance of the draconian terms represents a policy U-turn for Tsipras and for Syriza, which won Greece’s January general election pledging to end the punishing austerity programmes that since 2010 have left the country in deep recession, with 26% of the workforce unemployed and GDP shrunk by a quarter. |
| Party hardliners have said they will vote against the draft bailout package, which they see as a “noose around the neck” of the Greek people and a betrayal of almost all Syriza’s campaign promises. | Party hardliners have said they will vote against the draft bailout package, which they see as a “noose around the neck” of the Greek people and a betrayal of almost all Syriza’s campaign promises. |
| Sources close to the government told Greek media that the party’s radical Left Platform may well break away to form a new party. If the rebellion is much larger than expected Tsipras is widely expected to call snap elections – possibly as early as September. | Sources close to the government told Greek media that the party’s radical Left Platform may well break away to form a new party. If the rebellion is much larger than expected Tsipras is widely expected to call snap elections – possibly as early as September. |