Tuesday

19th Feb 2019

Tsipras asks Greek MPs to approve 'bad deal'

  • Tsipras: 'The safety of ideological pureness is not compatible with moments of crisis' (Photo: Rania Hatzi)

Greek prime minister Alexis Tsipras faces a crucial vote in the Greek parliament Wednesday (15 July) to adopt measures needed to open negotiations with creditors on a new bailout.

In a TV interview Tuesday evening, he called on lawmakers to pass the list of "prior actions" set out in the agreement reached at a euro summit Sunday and Monday, even if it is "a bad deal in several aspects".

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"Greece must stick to the fiscal adjustment the deal foresees," Tsipras said, adding that "alternatives during the summit were: agreement or disorderly bankruptcy".

"I am fully assuming my responsibilities, for mistakes and for oversights, and for the responsibility of signing a text that I do not believe in, but that I am obliged to implement."

In accordance with creditors' demands, the bill contains pensions, VAT, and tax reforms, as well as new governance of the Greek office of statistics.

The retirement age is raised to 67 years or 40 years of work.

New VAT rates include a 23 percent rate on restaurants, medical services, and transportation. Energy, water and fresh food will be taxed at 13 percent and medicines, books and theater tickets at 6 percent.

The VAT discount for Aegean islands is abolished except for remote islands, where it will abolished from 2016 only.

The corporate tax is raised to 28 percent and the luxury tax to 13 percent, while a solidarity tax is raised to 0.8 percent of the income, with retroactivity from 1 January 2015.

Rebellion

The bill, which includes measures Greek voters rejected at the referendum on 5 July, is controversial in Tsipras' government and far-left Syriza party.

The minister of productive reconstruction and Syriza's Left Platform chief, Panagiotis Lafazanis, asked Tsipras to withdraw the agreement and called Greece's creditors “brutal blackmailers and financial assassins”.

Defence minister Panos Kammenos, the head of Anel, the nationalist coalition partner of Syriza, said his party could not back the measures, but said he continued to support the prime minister.

The deputy minister of European affairs, Nikos Hountis, resigned from the cabinet in protest against the euro summit agreement.

Syriza parliamentary group spokesman Nikos Filis, for his part, said the party rebels would help Europe's "coup plotters" if they voted No.

"The government came under threat from economic and political forces that do not forgive the Greek people for making a different choice", he said Tuesday.

"I think that, often, we facilitate these plans. We cannot end with a left interregnum with the complicity of people of the left."

Tsipras himself called on his MPs to be realistic.

“The safety of ideological pureness is not compatible with moments of crisis,” he said in his TV interview on Tuesday.

As the bill should be approved with votes from opposition parties - the conservative New Democracy, the socialist Pasok, and the centrist To Potami - the main issue is the size of the Syriza rebellion and whether a new government will be formed.

No resignation

Analysts say that if more than 40 Syriza MPs vote against the bill, Tsipras will have to form a national unity government or call new elections.

"Elections are not in my immediate intentions", Tsipras said in his interview. But he did not answer questions about a government reshuffle.

He also ruled out his own resignation.

“The worst thing a captain could do while he is steering a ship during a storm, as difficult as it is, would be to abandon the helm", he said.

He explained that he "never had a plan B" and that Greece did not have enough cash reserves to leave the euro and go back to the drachma.

He nevertheless defended the agreement.

“To be frank, [Greece's creditors] are not only forced to give fresh money, but to give €82 billion, and are accepting the restructuring of the debt”, he said.

He also chastised his former finance minister Yanis Varoufakis.

"You can be a good academic and not necessarily a good politician", he said.

While the Greek parliament debates and votes on so-called prior actions, the US secretary of treasury, Jack Lew, will be in Frankfurt to discuss the Greek crisis with the European Central Bank chief Mario Draghi.


Lew will also be in Berlin and Paris on Thursday to meet German and French finance ministers Wolfgang Schäuble and Michel Sapin.

The US has been putting pressure on EU leaders to solve the crisis out of concern for the economic situation in Europe and the geopolitical consequences of Greece leaving the eurozone.


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