Fri, Aug 14, 2015 - Page 6 News List

Greece to vote on bailout, Germany expresses doubt


Greek lawmakers were to hold an emergency parliament session yesterday for a crucial vote on ratifying a hurriedly concluded bailout deal, but Germany — Europe’s de facto paymaster — has cast doubt on the agreement.

Greece and its creditors reached a technical agreement on a third international bailout after marathon talks in the early hours of Tuesday morning, but the deal, which Greek Prime Minister Alexis Tsipras says should promptly unlock default-saving funds for his debt-crippled country, must still be approved by eurozone member states.

A Greek government source said Tsipras had called an emergency session of parliament for yesterday.

Eurozone finance ministers will then meet today to give their verdict on the deal, Eurogroup President Jeroen Dijsselbloem’s spokesman said on Twitter.

As eurozone ministers prepared to examine the accord in Brussels, Tsipras said he was confident the 400-page document — set for a parliamentary vote in Athens late on Thursday night — would be approved.

“I am and remain confident that we will succeed in reaching a deal and loan support ... that will end economic uncertainty,” he said.

However, in an apparent swipe at Germany, the 41-year-old prime minister said certain EU states had a “hidden plan to reshape the eurozone, using Greece as the excuse.”

“Greece will not give them the excuse,” he said.

However, Berlin has urged caution.

“We have formulated questions,” Germany’s finance ministry said in a statement. “These are part of the review process which is not yet completed.”

German newspaper Bild cited a two-page finance ministry document that raised questions about Greece’s debt sustainability, the role of the IMF and over privatizations.

Berlin is also unhappy about Greece’s annual budget targets being scaled back, Bild said.

Greece and its creditors are under pressure to finalize the 85 billion euro (US$94.8 billion) deal by Aug. 20 when Athens must repay about 3.4 billion euros to the European Central Bank (ECB).

Separately, EU sources said Greece will tumble back into deep recession this year.

The Greek economy, which crawled out of a six-year recession only last year, will shrink 2.3 percent this year and another 1.3 percent next year, they said.

Growth should then return, running at 2.7 percent in 2017 and 3.1 percent in 2018, the sources said.

Greece has repeatedly complained that the austerity measures demanded by its creditors — the EU, the ECB and the IMF — in return for two previous bailouts have only hurt an economy that has contracted by a quarter since the crisis broke.

The latest rescue package calls for a gas market overhaul, ends most early retirement schemes, eliminates fuel price benefits for farmers and raises some taxes, among other measures.

The government said Greek banks — which were forced to shut down for three weeks as panicked customers withdrew billions of euros — would immediately receive 10 billion euros from the package, and will be fully recapitalized by the end of the year.

The draft deal comes after months of acrimonious negotiations between the creditors and Greece’s left-wing government, which took power in January.

Investors reacted with relief to news of the outline deal, with shares in Athens on Tuesday closing 2.14 percent higher for a fourth straight day of gains.

However, the positive run ended on Wednesday with the ATHEX index closing 1.93 percent down.

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