Thursday

20th Sep 2018

Greek parliament backs austerity plan

  • Tsipras (r): 'Everything else in its own time' (Photo: consilium.europa.eu)

The Greek parliament on Saturday (11 July) backed the government's proposed package of austerity measures to obtain a third bailout sending a positive signal to a key meeting of euro finance ministers later today.

The motion - which would allow the government to use proposals as basis for negotiations with its creditors - was passed by 251 votes in favour, 32 against and 8 abstentions.

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Prime minister Alexis Tsipras said the vote gives him a "strong mandate" to continue negotiations in Brussels. However it came at a heavy political price for the government.

The energy minister and the parliament speaker voted against the proposals which run contrary to the spirit of a government that was elected on the back of a promise to end austerity in January.

"The priority now is to have a positive outcome to the negotiations," Tsipras said after the vote. "Everything else in its own time."

The cross-party support in Athens comes as Reuters reported EU sources saying the country's creditors - the European Commission, the European Central Bank and the International Monetary Fund - believe their Greek reform proposals are positive.

Their assessment feeds into the meeting of the euro finance ministers at 4pm in Brussels.

The outcome of the meeting - with several hawkish finance ministers - will define Greece's immediate future in the eurozone with euro leaders and then EU leaders meant to meet Sunday to follow up on the Eurogroup's findings.

Eurogroup chief Jeroen Dijsselbloem said the proposals were "extensive" but did not spell out whether they were sufficient.

Tsipras' government has asked creditors for a third loan package of €53.5bn until 2018.

In return he has set out plans to save around €13bn, including previously no-go areas such as raising the retirement age and VAT hikes.

Athens is also hoping for a concession from creditors on its debt pile, considered by the IMF as unsustainable.

EU council president Donald Tusk Thursday noted that a good Greek proposal should be matched by creditors, and made special reference to the debt question.

"The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation."

But it remains a toxic question for some hardline eurozone countries.

"Broad support in Greece gives it more credibility, but even then we need to consider carefully whether the proposal is good and if the numbers add up," said Dijsselbloem, according to Reuters. "One way or the other, it is a very major decision we need to take."

Greece says No to creditors

In a result that sent shockwaves across the EU, around 60 percent of Greek voters Sunday rejected the bailout reforms proposed by creditors.

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