Sunday

28th May 2023

Greek MPs pass bailout austerity laws

  • Vote comes one week after Greeks rejected austerity in a referendum (Photo: Christopher Rose)

Greek prime minister Alexis Tsipras survived a rebellion by a quarter of his governing Syriza party on Wednesday night, after the Greek parliament passed a series of austerity measures needed to access a third EU bailout.

In a tense vote which followed a fractious debate, Greek MPs backed a raft of tax increases and spending cuts by a 229 to 64 majority in a vote which saw 39 Syriza MPs, including Tsipras’ outspoken former finance minister Yanis Varoufakis, oppose the planned bailout.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The neo-fascist Golden Dawn was the only party to oppose the bailout, which was backed by the centre-right opposition New Democracy.

The vote means that eurozone finance ministers will hold a conference call on Thursday (16 July) to discuss a €7 billion short-term financing plan using the European Financial Stability Mechanism that will be needed to keep Greece afloat while talks on a three year €86 billion loan package can be thrashed out over the summer.

The European Central Bank will also hold a meeting of its governing council, possibly with a view to extending financial support to Greek banks, which have remained closed for the last ten days.

Together with Varoufakis, a bitter critic of the German-led approach to the debt talks taken by the EU, who became an increasingly divisive figure among fellow eurozone ministers, Greek parliament speaker Zoe Konstantopoulou, and energy minister Panagiotis Lafazanis, whose Left Platform faction accounted for most of the rebels, were the most notable opponents to the bailout.

Government officials on Thursday morning hinted that Tsipras would reshuffle his ministerial team later in the day, although there is no indication that he will try to put together a national unity government. Syriza holds 162 seats in the 300 member parliament.

In a defiant speech, Tsipras told deputies that he had been faced with little option at the end of last weekend’s crisis summit in Brussels.

"I had a choice between a deal I did not agree with, or a disorderly default, or Schauble's choice of euro exit," said Tsipras, referring to the German finance minister’s wish to kick Greece out of the currency bloc. “There was right on our side, there was economic might on theirs,” Tsipras added

However, Vangelis Meimarakis, the interim leader of the conservative New Democracy party, accused Tsipras of weakness.

Outside the parliament, riot police were deployed as street violence erupted on the streets of Athens.

In accordance with the demands set out by its EU creditors, the new Greek austerity measures includes reforms to pensions, VAT, and corporation tax, as well as the country’s oft-maligned office of national statistics.

The retirement age will be raised to 67 years or 40 years of work, alongside increases to VAT rates, corporation tax and levies on luxury goods.

In return, talks are meant to open with a view to offering Greece a three-year €86 billion bailout, with the prospect of a restructuring of its debt burden as the only sweetener to a tough, German-led austerity programme.

However first other parliaments and governments in the eighteen other eurozone countries have to back opening bailout negotiations - with the German Bundestag (voting Friday) and a Finnish parliament committee (voting later Thursday) seen as the toughest hurdles.

Reacting to the Greek vote, German finance minister Wolfgang Schäuble said: "We are a step further" but he once again defended his controversial idea of a temporary eurozone exit for Greece.

"It would maybe be the better path for Greece," he told German radio.

The French parliament Wednesday became the first national legislature to formally back the bailout plan. Both the National Assembly and the Senate approved it by large majorities.

Greece to vote on second set of reforms

The Greek government has submitted new reforms on banks and the justice system to parliament, ahead of a vote Wednesday, as required by creditors.

Germany approves talks on new Greek bailout

The Bundestag Friday voted to open negotiations for a third aid programme for Greece but the number of rebel centre-right MPs voting No grew from 29 in February to 60.

Opinion

How the EU's money for waste went to waste in Lebanon

The EU led support for the waste management crisis in Lebanon, spending around €89m between 2004-2017, with at least €30m spent on 16 solid-waste management facilities. However, it failed to deliver.

Latest News

  1. How the EU's money for waste went to waste in Lebanon
  2. EU criminal complicity in Libya needs recognition, says expert
  3. Europe's missing mails
  4. MEPs to urge block on Hungary taking EU presidency in 2024
  5. PFAS 'forever chemicals' cost society €16 trillion a year
  6. EU will 'react as appropriate' to Russian nukes in Belarus
  7. The EU needs to foster tech — not just regulate it
  8. EU: national energy price-spike measures should end this year

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us