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Greece gets go-ahead for third multi-billion euro bailout

Greece got the green light on Wednesday to start repaying its debts and reviving its economy after eurozone finance ministers formally approved a third reforms-for-rescue of up to 86 billion euros.

[ATHENS] Greece got the green light on Wednesday to start repaying its debts and reviving its economy after eurozone finance ministers formally approved a third reforms-for-rescue of up to 86 billion euros.

A source close to the matter said Greece would receive a sum of 23 billion euros (S$35.9 billion) on Thursday morning, thereby allowing Athens to make a loan repayment of 3.4 billion euros due the same day to the European Central Bank.

The all-clear from the finance ministers in the 19-country eurozone came after the new bailout was approved by European parliaments, including the Bundestag of Germany, Greece's effective paymaster.

"This agreement provides perspective for the Greek economy and a basis for sustainable growth," said Jeroen Dijsselbloem, the Dutch finance minister who chairs the so-called Eurogroup.

"The Greek government is bound to implementing this wide-ranging reform package with determination and we will monitor the process closely," Mr Dijsselbloem said in a statement.

"We are certain to encounter problems in the coming years but I trust we will be able to tackle them," he added.

Pending endorsement from key national parliaments, Mr Dijsselbloem and the other eurozone finance ministers had on 14 August approved the bailout to keep Greece in the single currency bloc, pay its bills and revive its shattered economy.

The German parliament voted by an overwhelming majority on Wednesday to back the third bailout, with Chancellor Angela Merkel spared a major rebellion of deputies opposing the aid.

Interrupting their holidays for the second time this summer to cast ballots on a Greek rescue, lawmakers in the Bundestag lower house approved the 86 billion euro rescue plan by 453 votes to 113. Eighteen abstained.


While passage was virtually guaranteed given the dominance of Dr Merkel's left-right "grand coalition", the key question was whether the chancellor would face damaging dissent within her own camp.

In the end, 63 conservative rebels cast 'No' ballots and three abstained, marking only a slight increase from a vote last month approving the start of negotiations on the package.

At that time, 60 of the chancellor's MPs voted 'No' and five abstained. The mass-market Bild newspaper had predicted up to 120 deputies could revolt during Wednesday's vote.

Meanwhile Dutch Prime Minister Mark Rutte was grilled in parliament on Wednesday for his cabinet's support for the bailout, with the opposition accusing him of having "betrayed his electorate" by breaking his promise that no more money would go to Greece.

Greek Prime Minister Alexis Tsipras was on Wednesday mulling whether to early elections after the austerity bailout split his radical left Syriza party, leaving him powerless to push further reform bills through parliament.

A decision is expected next week.

Mr Tsipras rode to power in January on a wave of popular anger against the tax hikes, spending cuts and reforms demanded by creditors in exchange for two previous bailouts costing 240 billion euros.

Mr Tsipras has said that Greece's creditors - the European Union, European Central Bank, International Monetary Fund and the European Stability Mechanism - have agreed to discuss public debt relief measures when a first assessment of reform compliance is completed in November.

The debt currently stands at 312.8 billion euros, the finance ministry said Wednesday.

The Greek premier has also called for the European Parliament (EP) join the quartet of creditors in overseeing the recently-approved bailout deal.

The request was made in a letter sent on Wednesday to EP president Martin Schulz in which Mr Tsipras requested the "direct and full involvement of the EP - as the fifth actor in the context of the so-called creditors' quartet".

The initial 23 billion euro payment will see 10 billion euros placed in a fund to recapitalise Greek banks while another 13 billion euros will be partly used to pay back both the ECB and to cover an EU bridging loan of 7.16 billion euros, which was given in July to allow Athens to honour previous commitments to the ECB and the IMF.

The bailout accord goes far beyond economic management to include an extensive overhaul of Greece's health and social welfare systems plus its business practices and public administration.

Seemingly small details of daily life will also be affected by the new rules, from visits to the doctor to an extension of the expiry dates on pasteurised milk in the supermarkets.


Read more on the Greek crisis here

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