Greece submits bailout bill to parliament

  • 15/07/2015
Greek Prime Minister Alexis Tsipras (Reuters)
Greek Prime Minister Alexis Tsipras (Reuters)

Greece's government has submitted tough bailout terms demanded by eurozone creditors to parliament, as Prime Minister Alexis Tsipras battles for support for the draconian reforms from his ruling anti-austerity Syriza party.

With around 30 hardline Syriza party lawmakers threatening to oppose the latest reforms demanded by Greece's international creditors, Tsipras faced the unenviable task of turning to pro-European opposition parties to push the deal through parliament by Wednesday.

In the agreement struck on Monday with the eurozone to prevent Greece crashing out of the euro, the parliament in Athens must pass sweeping changes to labour laws, pensions, VAT and taxes.

Only then will 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 (NZ$148 billion), its third rescue program in five years.

"Mr Tsipras's Syriza government may see significant rebellion and approval of the deal in the Greek parliament will probably only be possible with the help of opposition parties - and even then, it is not completely certain it will pass," said strategist Kit Juckes at French bank Societe Generale.

With much of his party up in arms, Tsipras loyalists were hard at work to convince sceptics that the cuts could be softened through alternative measures.

But a number of prominent leftists, whose party was voted in January on an anti-austerity ticket, refused to budge.

"The great majority of Syriza organisations oppose this agreement... in terms of labour and pension issues this is worse than the last two bailouts," lawmaker and parliament vice-president Despoina Haralambidou told Vima FM radio.

Syriza's junior coalition partner, the nationalist Independent Greeks party (ANEL), said it would not approve the measures but would stay in the government.

Tsipras has predicted "the great majority of Greek people" will support the deal, which he said includes help to ease Greece's huge debt burden and to revive its crippled banking system.

The last-ditch deal is aimed at keeping Greece's economy afloat amid fears its banks were about to run dry and trigger its exit from the single currency.

Faced with a eurozone deeply distrustful of Athens after five months of tense meetings, 40-year-old Tsipras had to agree to demands that critics say rob Greece of financial independence.

"This agreement may pass with (opposition party) votes, but it will never pass the people," said the head of a hardline Syriza faction, Energy Minister Panagiotis Lafazanis.

If Greece does pass it, Europe's next step would be to push the deal through several national parliaments, many in countries that are loath to afford Athens more help.

The eurozone must now unite to tackle the immediate problem of finding funds to keep Greece afloat as Athens faces several huge debt payments to the European Central Bank and other creditors, while the bailout could take weeks if not months to finalise. It is to pay a 4.2-billion-euro instalment to the ECB next Monday.

Banks will stay closed in Greece until Wednesday, the finance ministry said.