Thursday

11th Aug 2022

Tsipras survives second EU bailout rebellion

  • Greek MPs moved a step closer to an €86bn EU bailout after backing laws on banking and judicial reform (Photo: europarl.europa.eu)

Greek prime minister Alexis Tsipras faced down a second rebellion from his governing Syriza party on Thursday (23 July), moving the country another step closer to obtaining an €86 billion EU bailout.

After another parliamentary sitting which went on into the small hours of the morning, deputies passed the second tranche of laws - this time on banking and judicial reform - needed to open formal bailout talks, by 230 to 63.

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Thirty six Syriza deputies either voted against the government or abstained, three fewer than the previous week, when the first series of austerity measures were adopted.

The left-wing Syriza party has 162 members out of 300 in the Greek parliament, and needs to retain the support of at least 120, the minimum required to sustain a minority government.

The centrist opposition parties also voted with the government.

Ahead of the vote, Tsipras turned up the heat on his own party, accusing Syriza rebels of "hiding behind the safety of my signature" and of failing to come up with an alternative plan.

“We have made difficult choices and now we must adapt to the new situation”, he said.

The legislation adopted on Wednesday night (22 July) includes an EU directive to bolster banks and protect savers' deposits of less than €100,000.

The bank recovery and resolution directive also sets outs a broader framework under which bank shareholders and creditors would cover the costs of a failed bank.

Greek deputies also passed a Code of Civil Procedure, which the 12 July euro-summit statement said will "accelerate the judicial process and reduce costs".

Passing the measures had been demanded by Greece’s creditors as a precondition for opening talks on a third rescue programme, worth €86 billion over three years.

For his part, Yanis Varoufakis, the former finance minister, voted with the government, despite having joined the rebels in opposing the bailout package last week.

Legislation to phase out early retirement schemes and the removal of subsidies for farmers, which had initially be scheduled for a vote on Wednesday, are set be adopted in the next package, due in the first week of August.

Earlier on Wednesday, the European Central Bank's (ECB's) governing council agreed to raise the cap on emergency assistance for the country’s fragile banking system by €900 million to €90.4 billion.

The move eases pressure on Greek lenders, which re-opened for business this week after a three-week lock-out. However, citizens can still only withdraw a maximum of €420 per week.

With the reforms moving ahead, EU economic affairs commissioner Pierre Moscovici told reporters on Wednesday that an agreement on Greece’s third bailout could be struck "in the second fortnight of August”.

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.

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