Accessibility links

Greek PM Faces New Battle to Secure Bailout Approval

  • Henry Ridgwell

Greece's government on Tuesday submitted tough new bailout legislation to parliament, with Prime Minister Alexis Tsipras pressing lawmakers to support reforms demanded by European creditors in exchange for badly needed cash.

The bill specifies new taxes, pension reforms, tighter supervision of government finances and the sell-off of 50 billion euros' worth of public sector assets.

European creditors are demanding parliamentary approval by Wednesday as a starting point for new negotiations on another bailout worth nearly $95 billion.

European leaders announced agreement on the new demands Monday as part of an effort to provide immediate relief to cash-starved Greek banks, which are struggling to provide the public with small, daily cash disbursements.

Analysts say any new deal also aims to keep Greece in the 19-nation grouping that uses the euro currency.

Several lawmakers have vowed to oppose the financial reforms, and some protests have occurred on the streets of Athens. One protester set fire to a Syriza flag outside parliament.

Many residents blamed Germany for demanding more austerity.

“They are so inhumane,” said one woman. "They take no consideration of other people's lives, those who have reached an impasse, who have committed suicide, children who are hungry.”

Others are turning on Tsipras and his Syriza party — which was elected on a promise of ending austerity.

German Finance Minister Wolfgang Schaeuble, right, talks with Finnish Finance Minister Alexander Stubb during a meeting of eurogroup finance ministers at the EU Council building in Brussels, Belgium, July 13, 2015.

German Finance Minister Wolfgang Schaeuble, right, talks with Finnish Finance Minister Alexander Stubb during a meeting of eurogroup finance ministers at the EU Council building in Brussels, Belgium, July 13, 2015.

"We will not permit for this game to go on, when in a democracy — and the country where democracy was born — the people do not decide but some unelected official from Berlin decides," said Panos Kammenos, head of Syriza’s coalition partner, the Independent Greeks party.

Tsipras also could struggle to sell the deal to the Greek people, who voted emphatically against further EU-led austerity in a referendum this month.

John Springford of the policy group Center for European Reform said, “It just repeats what was done before. And what happened before was that austerity killed growth and it raised unemployment. And it damaged the legitimacy of the economic reforms which the creditors insisted upon."

Germany ruled out any so-called "haircut" or reduction on the amount Athens owes its creditors.

“The German taxpayer does not want to be on the hook for Greece," said Springford. "And it will be very difficult for [German Chancellor Angela] Merkel, with the domestic pressures that she faces, to climb down on that. So I think that a ‘Grexit’ is still very much on the table" — a reference to a Greek exit from the eurozone.

U.S. Treasury Secretary Jack Lew will travel to Frankfurt, Berlin and Paris over the next two days for talks with top finance officials on the situation in Greece, the U.S. Treasury said Tuesday.

The Treasury said Lew would meet with European Central Bank President Mario Draghi on Wednesday in Frankfurt before heading to Berlin for a meeting with German Finance Minister Wolfgang Schaeuble on Thursday. Later the same day, he will head to Paris to meet with French Finance Minister Michel Sapin.

"In his meetings, Secretary Lew will engage with his counterparts on the global economy as well as discuss the path forward for Greece within the eurozone," it said.

Meanwhile, the International Monetary Fund said Tuesday that Greece had missed a second payment and was now $2.2 billion in arrears. Greece owes the European Central Bank $3.85 billion by July 20.

Some information for this report came from Reuters.

XS
SM
MD
LG