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Greece Licks its Wounds After Bailout Vote, ECB to Ease its Funding Squeeze on Greek Banks

July 16, 2015 

 

Riots in Athens, Greece, after the Parliament accepted the EU bail out package, July 15, 2015

 

Critical bill passes in Parliament – Major losses for SYRIZA

The prior actions bill was supported by 229 MPs, rejected by 64, while 6 abstained

Thursday, July 16, 2015

TO BHMA --

The critical bill containing a series of austerity measures and which is a prerequisite for a third Greek bailout was ratified after a tense and strained plenary session and vote, that saw the SYRIZA-Independent Greeks coalition government lose its majority in Parliament.

The bill with prior actions was approved by 229 MPs, rejected by 64 MPs, while a further 6 voted present. Out of SYRIZA’s 149 MPs, 32 voted against the bill, 6 voted 'present' and one abstained.

Most of the SYRIZA MPs who rejected the bill of prior actions belong to the Left Platform, suggesting that the governing party will experience a major schism. As such, a cabinet reshuffle is on the cards, however Prime Minister Alexis Tsipras must essentially rely on the opposition, should further measures be required, despite Panagiotis Lafazanis – the head of the Left Platform – that he will support the government.

The following SYRIZA MPs voted no: Aglaia Kyritsi, Yanis Varoufakis, Nantia Valavani, Kostas Isichos, Dimitris Kodellas, Dimitris Stratoulis, Konstantinos Zacharias, Eleni Sotiriou, Christos Karagiannidis, Ioannis Stathas, Vasilis Hatzilamprou, Konstantinos Lapavitsas, Thomas Kotsios, Michalis Kritsotakis, Despina Amanatidou, Zoi Konstantopoulou, Ioanna Gaitani, Evangelia Amanatidou-Paschalidou, Ilias Ioannidis, Vangelis Diamantopoulos, Rachel Makri, Dimitris Zerdelis, Thanasis Petrakos, Charalambos Dermitzakis, Panagiotis Lafazanis, Stathis Leoutsakos, Zanna Zisi and Vasilis Kyriakakis, while Vasiliki Katrivanou, Christos Karagiannidis, Dimitris Baxevanakis, Nikos Michalakis, Iro Dioti and Vasiliki Leva voted ‘present’ and Alexandra Tsanaka abstained from the vote.

Following the session in Parliament, the head of the River Stavros Theodorakis reportedly told Prime Minister Tsipras that vote acted as a vote of confidence towards the government, while New Democracy’s provisional leader Evangelos Meimarakis noted that his party is not considering – for the time being – a motion of censure against the government.

Violent clashes between anti-austerity protesters and riot police

Police detained 38 protesters - Television station van torched - About 13,000 attend demonstrations

Thursday, July 16, 2015

A about 9pm on Wednesday violent clashes broke out between anti-austerity protesters and riot police in Syntagma Square which carried on for about an hour and saw a television station van burned and 38 protesters detained, with 25 eventually arrested.

The protesters threw dozens of petrol bombs in the direction of riot police officers who were stationed outside the Grande Bretagne hotel, who responded with tear gas and flash bangs. Earlier, a group of protesters on Panepistimiou Street was attacked by riot police.

The clashes died out at around 10pm, with central roads in the city center remaining closed off for about half an hour. It was estimated that about 13,000 attended the anti-austerity demonstrations in downtown Athens.

Editorial: Mr. Tsipras’ duty

Thursday, July 16, 2015

TO VIMA --

The vote in Parliament clearly demonstrated that there is a wide political majority, for the first time in the past five years, that is in favor of the agreement that will ensure Greece’s membership in the Eurozone. It also revealed that there is a deep schism within the governing party, which poses a risk to the country’s political stability.

The Prime Minister now has the major responsibility of managing, on the one hand, the great majority that guarantees the country’s membership in the euro and on the other hand, he must face the radical, as it would seem, political disagreement of a large section of his parliamentary group. It is clear that his government cannot rely on MPs – much less ministers – who vote against an essential agreement for the country’s future. The absurdity of voting against the measures, but supporting the government defies all logic in a parliamentary democracy.

The loss of the government majority in Parliament will prompt initiatives from the Prime Minister to ensure the smooth progress of the country and complete the agreement with our European partners. With its stance, the opposition, which supported the agreement, has given him the initiative of the first move.

The necessary reshuffle – at least – of the government is the first necessary step towards restoring parliamentary and government normality. The country needs a homogenous and efficient government, which can manage the country’s major problems.

The Prime Minister, who is called upon to make decisions, must take into consideration the new political realities that were shaped by the vote in Parliament.

The choices that Mr. Tsipras will make with determine, to a great extent, the country’s progress over the next period.

The critical situation of the economy and the major outstanding issues that must be addressed to complete the agreement, make it necessary to maintain the consensus that was reached in Parliament.

http://www.tovima.gr/en/

 

Greece licks wounds after bailout vote, ECB move expected

ATHENS | By Lefteris Karagiannopoulos and George Georgiopoulos

Thu Jul 16, 2015 5:44am EDT --

Greece awoke with a political hangover on Thursday after parliament approved a stringent bailout program, thanks to the votes of the pro-European opposition, amid the worst protest violence this year.

The vote, vital to unlocking emergency financing from European partners as early as Thursday, left Prime Minister Alexis Tsipras weakened by a revolt in his leftist Syriza party but clinging to power for now.

The European Central Bank's governing council, meeting in Frankfurt, was expected to ease its funding squeeze on shuttered Greek banks, the first step toward permitting them to reopen after nearly three weeks' closure while cash rationing and other capital restrictions will remain in place.

European finance ministers were to hold a conference call on Thursday morning to agree on a plan for 7 billion euros in bridging funds to enable Greece to meet its immediate debt service needs and avoid defaulting on the ECB next Monday.

All 28 EU countries are expected to contribute, despite the reluctance of non-euro members such as Britain and the Czech Republic, after a compromise was found to use euro zone funds to guarantee their ring-fenced contributions.

Tsipras won 229 out of the 300 parliamentary votes in favor of the agreement he struck on Monday with euro zone partners on austerity measures and liberal economic reforms tougher than those rejected by voters in a July 5 referendum.

Some of the key measures, including an increase in value added tax, take effect immediately, although it will only be extended to hotels in October, after the tourist season.

But 32 out of his radical left Syriza's 149 lawmakers voted against the plan, six effectively abstained and one was absent, leaving the government without a majority of its own supporters.

"Tsipras continues wounded, until further notice," the front page of left-leaning Efimerida Ton Syntakton said. "Governments fall when they lose the support of the people, he says."

Among the dissenters were four members of the government, one of whom resigned, the speaker of parliament, and outspoken ex-finance minister Yanis Varoufakis, who compared the Brussels deal to the 1919 Versailles Treaty that imposed unpayable reparations on a defeated Germany after World War One.

"FORCED TO ACCEPT"

Tsipras told lawmakers he had accepted a package he did not believe in and which would harm Greece, but the only alternative was a disorderly bankruptcy that would be more catastrophic.

"I acknowledge the fiscal measures are harsh, that they won't benefit the Greek economy, but I'm forced to accept them," he said before the vote in the early hours of Thursday.

He is expected to reshuffle his cabinet to remove dissident leftists but he has ruled out early elections and said this week the captain does not leave the ship in a storm.

German Finance Minister Wolfgang Schaeuble, one of the toughest critics of Greece in the euro zone, said on German radio he still believed Athens would do better to leave the currency area temporarily to receive a debt writedown.

But Schaeuble said he would vote in favor of opening talks on a third bailout loan for Greece "with full conviction" when the German Bundestag debates the plan on Friday.

"We are a step further," Schaeuble told Deutschlandfunk radio after the Greek parliament voted to approve the entire package demanded by European partners. "This is an important step."

He said it would be hard to make Greece's debts sustainable without a "haircut" or writedown on the principal by European lenders, which Berlin says would be illegal under EU treaties.

The International Monetary Fund highlighted the issue in a stark report released this week, saying the only alternatives to "deep upfront haircuts" would be for European lenders to grant Athens a 30-year debt service holiday on present and future loans or make large annual fiscal transfers to the Greek budget.

All those options are deeply unpalatable to German and other euro zone creditor governments that do not want to tell their taxpayers that the money lent to Greece is not coming back.

Klaus Regling, head of the euro zone's bailout fund, said he expects it to contribute 50 billion euros to the third bailout of up to 86 billion euros.

"If everything should fail, then the Greek banking system will collapse," Klaus Regling, head of the European Stability Mechanism, told German broadcaster ARD.

The rest would come from 16 billion euros in remaining undisbursed IMF funds, once Athens has cleared arrears to the global lender, as well as privatization receipts and possible limited borrowing on the market near the end of the three-year program.

In Athens, cleaners removed overnight the debris of a pitched battle on the central Syntagma Square outside parliament between black-masked anti-bailout militants and riot police.

Protesters threw dozens of petrol bombs and hurled stones at the police, who responded with clouds of tear gas.

Tsipras won the vote thanks to the support of the center-right New Democracy, center-left Pasok and centrist To Potami opposition parties.

"The responsible opposition assumed the burden to rescue the country as did the prime minister, even though it was at the last minute," the conservative daily Kathimerini said in an editorial. "He deserves credit for this, but he lost the support of a large part of his party's lawmakers."

"He now has the big responsibility to ensure the country will have a government that keeps its pledges to creditors and implements them. Otherwise, his bold step will stall and with it the country’s European prospects," the paper said.

(Additional reporting by John O'Donnell in Frankfurt, Jan Strupczewski in Brussels, Caroline Copley in Berlin; Writing by Paul Taylor; editing by Anna Willard)

Riot police run as they disperse protesters during clashes in Athens, Greece July 15, 2015. Reuters/Yannis Behrakis left 3 of 3 right

 

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