11 Jul 2015

Greek MPs back bailout reform plan

5:03 pm on 11 July 2015

Greece's parliament has backed a government package of economic reforms aimed at ending the country's debt crisis and securing a new bailout.

Greece's Prime Minister Alexis Tsipras delivers a speech during a parliament meeting in Athens.

Greece's Prime Minister Alexis Tsipras delivers a speech during a parliament meeting in Athens. Photo: Anadolu Agency / AFP

After winning cross-party support in a late-night vote, PM Alexis Tsipras said he had a "strong mandate" to complete negotiations with Greece's creditors.

However, some of his own MPs withheld their support in protest at austerity measures contained in the new package.

The proposals are to be studied by eurozone finance ministers later.

EU sources say Greece's creditors - the European Commission, the European Central Bank and the International Monetary Fund - believe the plan is positive.

Eurozone officials are also expected to discuss Greek requests for some of the debt to be rescheduled.

In total, 251 MPs voted "Yes", 32 voted "No" and eight abstaining. Nine deputies were absent including former finance minister Yanis Varoufakis.

Among the members of Mr Tsipras's own Syriza party who abstained were Speaker Zoe Constantopoulou and Energy Minister Panagiotis Lafazanis.

"The priority now is to have a positive outcome to the negotiations," Mr Tsipras said in a statement after the vote. "Everything else in its own time."

Mr Tsipras is asking creditors for €53.5bn ($59.47bn) to cover Greece's debts until 2018. It would be the debt-strapped country's third bailout.

In return, he has given in to demands for a pension overhaul, tax rises and privatisations - measures rejected in a referendum last Sunday.

Greek banks are days away from running out of money and unless a deal is struck the country faces a possible exit from the euro.

The BBC's Mark Lowen in Athens says the package is a major climbdown for the prime minister, whose radical left-wing Syriza party was elected on a strong anti-austerity platform.

Addressing MPs before the vote, Mr Tsipras admitted that his government had made mistakes but he said the new proposals offered the best possible deal for Greece.

He described the lengthy negotiations with the creditors as "a battle".

"Now I have the feeling we've reached the demarcation line. From here on there is a minefield."

Mr Tsipras said the bailout deal "entails many proposals that are far from our pledges", but he added it was "marginally better" than the proposals put forward last month by creditors.

He said there was a "national duty to keep our people alive and in the eurozone".

The Eurogroup - eurozone finance ministers - is due to discuss the reforms at 13:00 GMT and a meeting of eurozone heads of government is scheduled for Sunday.

That will be followed by a full EU summit later that day.

The measures submitted in the new Greek document include:

  • tax rise on shipping companies
  • unifying VAT rates at standard 23 percent, including restaurants and catering
  • phasing out solidarity grant for pensioners by 2019
  • €300m ($332m) defence spending cuts by 2016

    [LI privatisation of ports and sell-off of remaining shares in telecoms giant OTE

  • scrapping 30 percent tax break for wealthiest islands

If approved, the proposals must also be ratified by parliaments in several EU states.

Greece's eurozone partners seem divided over the Greek proposals so far.

French President Francois Hollande described them as "serious and credible", but Germany's finance ministry warned that there was "very little leeway in terms of restructuring".

Greece's creditors have already provided more than €200bn in two bailouts over the past five years. The second expired on 30 June.

Greek banks are closed and a €60 daily limit on cash machine withdrawals, imposed on 28 June, remains in force. With a shortage of €20 notes, for many the limit is in effect €50.


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