Greek parliament backs government's bailout plan

Greece's parliament backed the government's reform plan containing austerity measures to win a third bailout early Saturday, but with the government suffering significant losses from dissenting lawmakers.

The motion sought to authorize the government to use the proposal as a basis for negotiation with international creditors during the weekend. It passed with 251 votes in favor, 32 against and 8 voting 'present' — a form of abstention — in the 300-member parliament.

Those who voted 'present' or were absent, as well as two of those who voted against, were members of Prime Minister Alexis Tsipras' left-wing Syriza party — raising questions about the stability of his government.

The dissenters included two ministers — Panagiotis Lafazanis who holds the energy portfolio and Dimitris Stratoulis who holds the social security portfolio — and prominent party member and Parliament Speaker Zoe Konstantopoulou.

"I support the government but I don't support an austerity program of neoliberal deregulation and privatizations which ... would prolong the vicious circle of recession, poverty and misery," Lafazanis said in a statement released to the press explaining his "radical and categorical" objection to the proposal.

Former finance minister Yanis Varoufakis, who resigned this week, was absent for family reasons, saying on Twitter he was spending the weekend with his daughter who was visiting from Australia. Although he sent a letter saying he would have voted in favor had he been present, it could not be counted among the 'yes' votes under parliamentary rules.

All opposition parties except the Nazi-inspired Golden Dawn and the Communist Party voted in favor.

Tsipras had called a snap vote in parliament, asking for approval of a reform package after abruptly offering last-minute concessions to try to save the country from financial meltdown and a possible eurozone exit.

The proposed measures, including tax hikes and cuts in pension spending, are certain to inflict more pain on a Greek public who just days ago voted overwhelmingly against a similar plan.

But the new proposal, if approved by Greece's international creditors, will provide longer-term financial support for a nation that has endured six years of recession.

After walking into a party meeting to applause, Tsipras rallied his Syriza lawmakers to throw their weight behind the new proposals, urging them to help keep Greece in the eurozone.

"We are confronted with crucial decisions," a government official quoted Tspiras telling the lawmakers. "We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us but certainly not given a mandate to take Greece out of the eurozone. We are all in this together." 

Greece asked for $59 billion to help cover its debts until 2018, a review of primary surplus targets in light of the sharp deterioration of its economy, and a reprofiling of the country's long-term debt.

The International Monetary Fund (IMF), the European Commission (EC) and the European Central Bank (ECB) are analyzing proposals submitted by Greece on economic reforms and will deliver their views by the end of Friday, according to an EC spokesman.

The crisis has had real consequences for the Greek people. Greek banks have been closed since June 29, when capital controls were imposed and cash withdrawals rationed after the collapse of previous bailout talks.

Greece missed an IMF loan repayment the next day and faces a critical July 20 deadline to pay out about $3.8 billion on bonds held by the ECB. The country cannot make that payment without aid.

The move did not satisfy some people suffering from the shutdown of bank services and the uncertainty of their leaders' next moves.

"The new measures are suffocating," said Irini Skordara, a 79-year-old pensioner, one of dozens of pensioners lining up outside a bank to get their pension payments. "Better we live poor than to plunge into chaos."

Tsipras’ latest offer to creditors includes defense spending cuts, a timetable for privatizing state assets such as the Piraeus port and regional airports, hikes in value added tax for hotels and restaurants and slashing a top-up payment for poorer pensioners.

Some Greeks said they were furious with the proposed tax hikes and diminished pensions.  

"If this is Europe, then we don't want this Europe," Aristidis Dimoupulos, a marketing professor in Athens, told the Associated Press. "If this is the eurozone, we don't care if we go out or in. If in this life we'll be slaves, it's better to be dead."

A majority of Greeks agree that the country must remain in the euro. According to a poll published in Parapolitika newspaper on Friday, 84 percent of Greeks surveyed said they want to keep the currency; just 12 percent favored a return to the drachma.

Still, a majority said they oppose the austerity measures that Tsipras and his party hope will garner a deal with eurozone creditors. Of those polled, 55 percent said it was the right choice to vote "no" in last week's referendum on whether Athens should accept austerity conditions for bailout funds.

It is unclear whether all the creditors will back the latest reforms package, which has terms strikingly similar to the ones Greeks rejected in the referendum.

France, Greece's strongest supporter in the eurozone, rushed to offer praise, with President François Hollande calling the offer "serious and credible." Eurogroup head Jeroen Dijsselbloem called it a "thorough piece of text" but declined to go into specifics.

"Broad support in Greece gives it more credibility, but even then we need to consider carefully whether the proposal is good and if the numbers add up," Dijsselbloem told reporters. "One way or the other, it is a very major decision we need to take."

The lenders' backing is crucial for eurozone leaders to support the proposals. Dijsselbloem, EC President Jean-Claude Juncker, ECB President Mario Draghi and IMF head Christine Lagarde were said to have made a first assessment of the plans by teleconference early on Friday.

Some Greeks have adopted a wait-and-see approach until they get a response from their creditors.

"I don't know. The chances are fifty-fifty" for a deal, said Athens resident Omiros Fotiadis. There were many things to take into account, he said. "One being if all the European countries will accept the agreement, as well as the institutions. And the other is whether the agreement ... will be accepted internally."

Whether or not lenders accept the deal, Greece will have to overcome a hardening of attitudes toward it among its eurozone partners, including Germany, which has contributed more to Greek bailouts than any other country. Some, including a senior member of German Chancellor Angela Merkel's party, greeted the latest reform proposals with skepticism.

Finance ministers of the 19-nation euro area will meet on Saturday to decide whether to recommend opening negotiations on a third bailout program for Athens despite widespread exasperation over the five-year Greek debt crisis.

But the plan could cause trouble for Tsipras at home, from hard-liners in his party as well as in his junior coalition partner. Any new deal would also have to be endorsed by national parliaments, including Germany’s.

"The proposals are not compatible with the Syriza program," said Energy Minister Panagiotis Lafazanis. He declined to say how he would vote. "We will take it step by step," he said.

A small group of pensioners held a protest outside the finance ministry in Athens and an anti-austerity demonstration is planned for Friday evening.

The country has had two bailouts worth $268 billion from the IMF and the rest of the eurozone since 2010, but its economy has shrunk by a quarter, unemployment is at more than 25 percent, and 1 in 2 young people is out of work.

Wire services