Bailout within reach after Greek MPs vote ‘yes’

By Helen Popper

Ministers must iron out details such as IMF role, bank rescue and privatization.

Eurozone finance ministers are optimistic they will be able to agree a €85 billion bailout for Greece Friday, despite concerns over the sustainability of the country’s debt.
Arriving in Brussels for a meeting of ministers following the Greek Parliament’s approval of the third rescue package, Eurogroup chairman Jeroen Djisselbloem said: “It won’t be short … there will be questions, there will be criticism … [but] hopefully at the end of the meeting we will have a positive outcome.”

Djisselbloem said there were lingering concerns about “recapitalization of banks, privatization and the involvement of the [International Monetary Fund] – that is still important to many countries.”
Chief among those is Germany, whose Finance Minister Wolfgang Schäuble cautioned that without the involvement of the IMF the Eurogroup would only approve a bridging loan to allow Greece to make an important August 20 debt repayment.
The IMF said Thursday it would only decide whether to put funds into the rescue “once the steps on the authorities’ program and debt relief have been taken, expected at the time of the first review.” That is expected to happen in October.
French Finance Minister Michel Sapin was more optimistic about the chances of approving the bailout, telling reporters that “today we are here to decide.” Sapin also praised the Greek government for choosing the aid-for-reforms package that its parliament voted through early Friday after an all-night debate.
Greek lawmakers overwhelmingly approved the country’s third bailout despite cross-party criticism of the stringent austerity measures and painful reforms that Athens has accepted in exchange for fresh funding.
Tortuous wrangling over parliamentary procedures threatened to derail the crucial session in the early hours, but exhausted lawmakers eventually voted 222-64 in favor of the bailout with 11 abstaining after 24 hours of fractious debate.
Sapin and Djisselbloem said the controversial issue of how to reprofile Greece’s debt — for instance, by giving Greece more time to make repayments — could be tackled in the fall.
Sapin said: “Our calendar is to discuss in October the reprofiling of the Greek debt — which is essential — and to make sure it is bearable. This will allow the Greek economy to breath, to pick up pace again, and the Greek businesses to start to work again.”
If the deal gets the go-ahead at the Eurogroup it would pave the way for the first tranche of loans to be released in time for Greece to meet a roughly €3 billion debt repayment due to the European Central Bank next Thursday.

Internal dissent

However, approval of the bailout comes at a high cost, as it is pushing Greece’s ruling Syriza party towards a split. About 40 party rebels, including former finance minister Yanis Varoufakis, refused to back the bill, again forcing Alexis Tsipras to rely on opposition support.
That will fuel speculation about an early election as the prime minister seeks to capitalize on his popularity and oust dissenters who say the agreement tramples core party values. There were unconfirmed media reports that Tsipras would have to seek a confidence vote on August 20 because of the growing level of dissent inside his left-wing party.
On the campaign trail at the beginning of the year, Tsipras vowed to roll back hated austerity policies if he got to power. Seven months on, he argues that the specter of a disastrous “Grexit” forced him to agree on the tough terms stipulated by the nation’s creditors at a July 13 summit in Brussels.