IMF warns Greece would need far more debt relief to stop it crashing out of the common currency than European governments have so far been willing to contemplate
Athens : Greece geared up for a parliamentary vote on draconian reforms demanded by eurozone creditors in exchange for a huge new bailout, in what could be Prime Minister Alexis Tsipras’s toughest political test yet.
The crucial vote comes hours after the International Monetary Fund issued a stark warning that Greece would need far more debt relief to stop it crashing out of the common currency than European governments have so far been willing to contemplate.
The last-ditch deal struck on Monday saw Tsipras agree to sweeping changes to labour laws, pensions, VAT and other taxes — many of which had been rejected by voters in a public referendum — in exchange for new funds to keep Greece’s struggling economy alive. The parliament in Athens must approve the deal before the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros ($95 billion), its third rescue programme in five years.
But while the motion is expected to pass, Tsipras has been forced to turn to pro-European opposition parties to get it through in the face of opposition from some 30 rebel lawmakers in his own radical left Syriza party, raising questions about his political survival.
The embattled premier said he took “full responsibility” for signing an accord he did “not believe in, but which I signed to avoid disaster for the country” as it teetered on the brink of economic collapse.
“A prime minister must fight, speak the truth, take decisions and not run away,” Tsipras said in an interview on Greek public television, when asked whether he would resign if the reforms fail to pass or he loses his parliamentary majority.
Fresh polls by Kapa Research found 72 per cent of Greeks surveyed thought the deal was necessary, with the majority blaming Europe for the “tough measures”, but many see it as a humiliating climb down for a country still reeling from years of painful austerity. Civil servants are set to stage a 24-hour strike today, the first big stoppage since Tsipras took power, while several in Syriza have vowed to vote against the plans, which contradict much of their own agenda.
“The great majority of Syriza organisations oppose this agreement… in terms of labour and pension issues this is worse than the last two bailouts,” parliament vice-president Despoina Haralambidou told Vima FM radio. Under the new plan, eurozone governments will contribute between 40 and 50 billion euros to Greece’s new three-year bailout, the IMF will contribute another major chunk and the rest will come from selling off state assets and the financial markets, a European official said.
