Thursday, July 16, 2015
GREECES GOVERNMENT PASSES THE YES VOTE FOR HIGH TAXES-AUSTERITY CLAMP DOWN.
GREECE DEBT SITUATION ON WORLD MARKETS
Greek parliament approves bailout measures as Syriza fragments-Reuters By Renee Maltezou and Angeliki Koutantou-JULY 16,15-YAHOONEWS
ATHENS (Reuters) - The Greek parliament passed sweeping austerity measures demanded by lenders to open talks on a new multibillion-euro bailout package to keep Greece in the euro, but dozens of hardliners in the ruling Syriza party deserted Prime Minister Alexis Tsipras.The package was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions. But Tsipras required the support of pro-European opposition parties to push the measure through, leaving a question over the future of his government.Tsipras said there was no alternative to the package, which he acknowledged would cause hardship, but he stood by the decision. "I am the last person to shirk this responsibility," he told parliament.Government spokesman Gabriel Sakellaridis acknowledged the vote laid bare a split in Syriza, but he said the government's priority was to secure the bailout, suggesting that there would be no immediate move towards new elections.In exchange for funding worth up to 86 billion euros ($94 billion), Greece has accepted reforms including significant pension adjustments, increases to value added taxes, an overhaul of its collective bargaining system, measures to liberalize its economy and tight limits on public spending.It has also agreed to sequester 50 billion euros of public assets in a special privatization fund to act as collateral on the deal.The measures were branded "social genocide" by the firebrand speaker of parliament Zoe Constantopoulou and there were violent clashes between protestors and police outside parliament as the debate went on before the vote.Among the 38 Syriza rebels was former Finance Minister Yanis Varoufakis, who was sacked by Tsipras last week and who denounced the bailout deal as "a new Versailles Treaty" - the agreement that demanded unaffordable reparations from Germany after its defeat in World War One.Energy Minister Panagiotis Lafazanis and Deputy Labor Minister Dimitris Stratoulis also voted against the package.Amid speculation that both ministers could lose their jobs in a reshuffle, possibly as early as Thursday, Lafazanis said he remained loyal to the government but was ready to offer his resignation, joining Deputy Finance Minister Nadia Valavani, who stepped down earlier on Wednesday."We support Syriza in government and we support the Prime Minister. We don't support the bailout," he said after the vote.Elected in January on an anti-austerity platform, Tsipras made an about-turn following grueling all-night negotiations in Brussels on Monday, giving in to lenders' demands for immediate reforms to prevent a chaotic exit from the single currency.Speaking in parliament before the vote, Tsipras made clear he was supporting the package against his will but there was no alternative if Greece was to avoid financial collapse."I acknowledge the fiscal measures are harsh, that they won't benefit the Greek economy, but I'm forced to accept them," he said as he made a final appeal for support."A NEW VERSAILLES TREATY"-With Greek parliamentary approval secured, the way has been cleared for other national parliaments to approve the start of bailout talks and for the release of funding to allow Greek banks to re-open, more than two weeks after capital controls were imposed to prevent them from collapsing.Eurozone finance ministers are due to hold a conference call on Thursday at 10 a.m. (0800 GMT) to discuss the vote.With Greece facing an urgent deadline on July 20, when a 3.5 billion euro payment to the European Central Bank is due, EU officials raced to agree a bridge financing accord that would enable Athens to avoid defaulting on the loan.Despite strong objections from Britain and the Czech Republic - EU countries that do not use the euro - a 7 billion euro loan is expected to be extended to Greece from the European Financial Stability Mechanism (EFSM), an EU-wide fund not intended for euro zone funding needs.Given the hurdles facing the agreement, doubts have surfaced about how long it could hold together, with one senior European Union official saying it had a "20-, maybe 30-percent chance of success".After its deepest crisis since World War Two, the Greek economy has lost more than a quarter of its output and more than one in four of its workforce is unemployed. It is unclear how it can sustain the burden of one of the most far-reaching austerity programs ever imposed on a euro zone country.A study by the International Monetary Fund issued on Tuesday called for much more debt relief than Greece's euro zone creditors, particularly Germany, have been prepared to accept so far.Berlin, which along with the other creditors knew about the IMF study before agreeing to new bailout talks, may wince at providing huge debt relief to a country it scarcely trusts to honor its promises.But Germany insists on having the IMF in the negotiations to help keep Greece in line. It may countenance extending repayment periods for Greek debt but has said it will not accept a writedown, with the finance ministry insisting it could not accept "a debt haircut via the backdoor".-"EUROPE'S BANKRUPT CHILD"-The European Commission published its own assessment of Greece's debt burden on Wednesday that also offered the prospect of debt relief. While ruling out any write-offs, the Commission said debt reprofiling was possible, as long as Greece implemented the reforms to which it has agreed.Washington has stepped up pressure for a deal between the euro zone and NATO member Greece. U.S. Treasury Secretary Jack Lew is making a short-notice trip to Frankfurt, Berlin and Paris this week to press for a quick agreement.Although the bailout package is much tougher than the Greek people could have imagined when they resoundingly rejected a previous offer from the creditors in a referendum on July 5, most want to keep the euro.With banks shut and the threat of a calamitous exit from the currency bloc hovering over the country if it cannot conclude a deal, many Greeks see the package as the lesser of two evils."We are Europe's bankrupt child and as a child, Europe has been supporting us for five years and told us what we needed to do to get out of this situation," said Yannis Theodosis, a 35-year-old civil engineer. "We did nothing and now we are paying the consequences."Civil servants held a strike on Wednesday, as did pharmacists, whose industry would be opened up under the reform package, in demonstrations that passed peacefully until a small group threw petrol bombs at police, who responded with tear gas and flash bombs.Calm later returned but nearby streets were empty and garbage bins were still burning. About 30 people were detained, according to a police source.(Additional reporting by Gina Kalovyrna, George Georgiopoulos, Ingrid Melander, Karolina Tagaris, Michele Kambas in Athens, Alastair Macdonald and Jan Strupczewski in Brussels, Madeline Chambers, Caroline Copley in Berlin, Mark John and Yann Le Guernigou in Paris, William James in London, David Gaffen in New York; Writing by Matthias Williams and James Mackenzie; Editing by Philippa Fletcher, Peter Graff, David Stamp, Toni Reinhold)
Greek lawmakers pass austerity bill despite dissent-Associated Press By ELENA BECATOROS and DEREK GATOPOULOS-JULY 16,15-YAHOONEWS
ATHENS, Greece (AP) — Greek lawmakers voted overwhelmingly early Thursday to approve a harsh austerity bill demanded by bailout creditors, despite significant dissent from members of Prime Minister Alexis Tsipras' own left-wing party.The bill, which imposes sweeping tax hikes and spending cuts, fueled anger in the governing Syriza party and led to a revolt against Tsipras, who has insisted the deal forged after a marathon weekend eurozone summit was the best he could do to prevent Greece from catastrophically crashing out of the euro, Europe's joint currency.The legislation was approved with 229 votes in favor, 64 against and six abstentions — and won the support of three pro-European opposition parties.Among Syriza's 38 dissenters were prominent party members, including Energy Minister Panagiotis Lafazanis and former finance minister Yanis Varoufakis, who many blame for exacerbating tensions with Greece's creditors with his abrasive style during five months of tortured negotiations.The post-midnight vote might not pose an immediate threat to Tsipras' government, but it raised more doubts over whether it could implement the harsh new austerity program demanded by rescue lenders.The vote came after an anti-austerity demonstration by about 12,000 protesters outside parliament degenerated into violence as the debate was getting underway Wednesday night. Riot police battled youths who hurled petrol bombs for about an hour before the clashes died down.The bill was the first step Greece must take in order to begin negotiations with creditors on a new bailout — its third in five years — of about 85 billion euros ($93 billion) in loans over three years.Dissenters argued that Greeks could not face any further cuts after six years of recession that saw poverty and unemployment skyrocket and wiped out a quarter of the country's economy.Tsipras has been battling all week to persuade party hard-liners to back the deal. He has acknowledged the agreement reached with creditors was far from what he wanted and trampled on his pre-election promises of repealing austerity, but insisted the alternative would have been far worse for the country."We had a very specific choice: A deal we largely disagreed with, or a chaotic default," he told parliament ahead of the vote.Tsipras had urged Syriza members to back the bill despite having urged voters to reject earlier, milder creditor demands in a July 5 referendum. Greeks voted overwhelmingly to reject those proposals.Finance Minister Euclid Tsakalotos, who took over from Varoufakis the day after the referendum, said the deal Greece reached with its creditors on Monday was the only possible choice."I must tell you, that Monday morning at 9:30, it was the most difficult day of my life. It was a decision that will weigh on me for the rest of my life," Tsakalotos said."I don't know if we did the right thing. But I know we did something with the sense that we had no choice. Nothing was certain and nothing is," he told parliament.High-ranking dissenters included Alternate Finance Minister Nadia Valavani, who resigned from her post earlier Wednesday, saying she could not vote in favor of the bill.In a letter sent to Tsipras on Monday and released by the finance ministry Wednesday, Valavani said she believed "dominant circles in Germany" were intent on "the full humiliation of the government and the country."The economy ministry's secretary general, Manos Manousakis, also resigned over the measures. Parliament speaker Zoe Konstantopoulou, a prominent Syriza member, slammed the deal as a product of blackmail, calling it a "crime against humanity" and "social genocide."Thursday's vote came after more than two weeks of capital controls, with Greek banks and the stock exchange shut since June 29 and ATM cash withdrawals limited to 60 euros per day.With its banks dangerously low on liquidity and the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros ($4.6 billion) to the European Central Bank, and is also in arrears on 2 billion euros to the IMF.Negotiations on the new bailout will take an estimated four weeks, leaving European finance ministers scrambling to find ways to get Athens some money sooner.The European Commission has proposed giving Greece 7 billion euros in loans from a special fund overseen by all 28 EU nations so it can meet its upcoming debts. The loan would be made pending the start of a full bailout program, but faces resistance from Britain, a non-euro member of the EU.Germany argued one way for Greece to meet its financing obligations was for it to issue IOUs for domestic needs.____Raf Casert in Brussels and Frank Jordans in Berlin contributed to this report.
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