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Greek lawmakers debate third bailout deal

Friday, August 14, 2015 - 10:03
Euclid Tsakalotos.jpg
Greek Finance Minister Euclid Tsakalotos delivers his speech during a night parliamentary session in Athens, Greece, early on Aug 14, 2015.

[ATHENS] Greek lawmakers were preparing to vote on Friday on the terms of the country's third international bailout since 2010, a deal which has split the ruling radical left Syriza party and met with a wary response in Berlin.

The vote comes ahead of a meeting of eurozone finance ministers where they are expected to issue their verdict on the draft deal reached by Athens and its creditors after weeks of negotiations - and despite Germany saying it needs further clarifications from Greece before giving the deal the nod.

"I must to go to the Eurogroup tomorrow with the deal approved (by parliament)," Finance Minister Euclid Tsakalotos told the chamber.

After a full day of debate on Thursday, lawmakers were due to hold the vote shortly after 7.00am (0400 GMT).

Greece hopes that by quickly adopting the 85-billion-euro (S$132.5 billion) rescue plan negotiated with the European Union, European Central Bank and International Monetary Fund it can unlock a first tranche of aid before a 3.4-billion-euro repayment to the ECB falls due on August 20.

Failing an agreement by then, Greece would need to secure more emergency funding to avoid a payment default.

Finland on Thursday was the first eurozone peer to give its approval, with the proviso of numerous preconditions.

"There are 47 preconditions outlined by the 'troika' to the approval of the first payment," said Finnish Finance Minister Alexander Stubb, referring to Greece's three creditors.

In case of agreement, the first tranche would range between 26 and 43 billion euros, Mr Stubb said.

Several other European parliaments need to approve the preliminary agreement of the bailout, and the IMF said Thursday it wants Greece's European partners to decide on the package of debt relief before determining if it will take part in Athens's next bailout.

GERMAN CAUTION

German's deputy finance minister Jens Spahn sounded a note of caution about the prospects of a final deal in Brussels Friday, saying Berlin and Paris still had questions on Greece's plans to privatise parts of its economy.

The Greek government had "come a long way", showing a "high degree of willingness to reform", Mr Spahn conceded.

However, "we need more details in some areas. That is what we need to talk about - by the way we have a joint proposal from France and Germany," he added, without giving details.

German Bundestag president Norbert Lammert has said that in the event of a thumbs-up from Greek lawmakers and the Eurogroup of finance ministers, the German parliament will convene an extraordinary session on August 18 or 19 to vote on the bailout.

Better-than-expected growth figures gave Greek Prime Minister Alexis Tsipras, whose reform plans have sparked a rebellion by Syriza hardliners, a boost going into the vote and eurozone meeting.

Thursday's official estimates showed the economy expanding 0.8 per cent in the second quarter of 2015 - despite the cash-strapped government imposing capital controls to prevent a bank run.

National statistics agency Elstat also revised upwards its first-quarter growth estimate, from a 0.2 per cent contraction to zero growth.

The figures contrasted with EU forecasts this week showing Greece sinking back into a deep recession this year, just a year after it crawled out of a six-year recession.

'END ECONOMIC UNCERTAINTY'

Mr Tsipras has expressed confidence the new rescue plan will carry the day, both in Athens and other European capitals.

"I am and remain confident that we will succeed in reaching a deal and loan support... that will end economic uncertainty," he said.

During the last two votes on reforms demanded by creditors in exchange for the cash injection, dozens of Syriza lawmakers mutinied, leaving him relying on the opposition to push through more of the austerity he once vowed to dump.

The party was heading for a bitter split in the upcoming vote, with the parliament chief criticising the finance minister, the party's youth wing saying Greece should leave the eurozone altogether, and the party's top eurosceptic calling for a nationwide anti-austerity movement, drawing a rebuke from the government.

The embattled premier has warned he may be forced to call early elections if the revolt continues.

An EU source said it was unclear if the bailout would be finalised by August 20, in which case EU member states would have to approve emergency funding.

The latest rescue package calls for a gas market overhaul, ends most early retirement schemes, eliminates fuel price benefits for farmers and raises some taxes, among other measures.

The government said Greek banks - which shut down for three weeks from late June as panicked customers withdrew billions of euros - would immediately receive 10 billion euros from the package, and be fully recapitalised by the end of the year.

AFP

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