Michael Sohn / AP

German lawmakers approve plan for Greek bailout

Lawmakers overwhelmingly vote in favor of opening discussion for three-year Greek bailout plan worth $93 billion

German lawmakers gave their go-ahead Friday for the eurozone to negotiate a third bailout for Greece, heeding a warning from Chancellor Angela Merkel that the alternative to a deal with Athens was chaos.

Lawmakers voted 439-119 in favor of the commencement of discussions. There were 40 abstentions.

Merkel needed Parliament's approval to launch talks thrashing out details of the package.

On Monday, Merkel and other eurozone leaders struck a preliminary deal for a three-year bailout of Greece that's expected to be worth $93 billion.

Germany has been the largest single contributor to Greece's bailouts. Berlin has taken a hard line, insisting on stringent spending cuts and tax hikes in return.

Merkel acknowledged concerns over the chances of a successful bailout, but said the alternative “would not be a time-out from the euro that would be orderly ... but predictable chaos” for Greece.

She will have to return to Parliament to seek approval for the final deal when the negotiations are concluded. Most indications are that the detailed bailout talks will take about four weeks.

“I know that many have doubts and concerns about whether this road will be successful, about whether Greece will have the strength to take it in the long term, and no one can brush aside these concerns,“ she said. “But I am firmly convinced of one thing: We would be grossly negligent, even irresponsible, if we did not at least try this road.”

Merkel's finance minister, Wolfgang Schaeuble, who has talked particularly tough on Greece, said that “the German government did not take this proposal lightly.” He added that if Greece does its part, then Germany will do its utmost to “making this last chance a success.”

Germany is one of the few eurozone countries that has to get parliamentary approval for the commencement of detailed Greek bailout discussions. Earlier, Austrian lawmakers gave their support, according to the Austria Press Agency.

In Athens, Prime Minister Alexis Tsipras reshuffled his Cabinet on Friday following a rebellion within his party over a parliamentary vote to approve the measures demanded for new bailout talks to start.

Tsipras removed two ministers who had voted against the government line. He replaced Energy Minister Panagiotis Lafazanis with former Labor Minister Panos Skourletis, while Trifon Alexiadis became the new alternate finance minister following Nadia Valavani's resignation in the runup to the vote days ago.

Friday's reshuffle was limited, with nine changes overall.

A little more than a quarter of Tsipras 149 radical-left Syriza party lawmakers either voted against or abstained in the vote, including two cabinet members as well as the parliament speaker and the former finance minister, Yanis Varoufakis. Tsipras still won an overwhelming majority as three opposition pro-European parties backed the proposals.

The legislation, which includes consumer tax increases and pension cuts, was demanded by Greece's European creditors before negotiations on a third bailout could begin. Elements of the bill are implemented immediately, with changes to consumer tax coming into effect Monday, the finance ministry said.

The Greek Parliament's approval paved the way for an increase in the amount of emergency liquidity assistance to Greek banks from the European Central Bank. As such, the government said Thursday that banks in Greece would reopen Monday for limited transactions, for the first time in three weeks after capital controls were imposed June 29 ahead of a referendum Tsipras called on creditor proposals.

A central bank official said the Bank of Greece was working with the finance ministry and examining all possibilities so the banks could open as soon as possible. The official spoke on condition of anonymity because the discussions were not public.

Greeks have been limited to cash withdrawals of 60 euros ($67) per day since the banks shut.

Tsipras has acknowledged that the package he signed up to went against his party policies and his election promises to repeal austerity imposed over the last five years in return for Greece's two international bailouts. But he has insisted he had no other choice, as the alternative would have seen Greece catastrophically forced out of Europe's joint currency, the euro.

In a party meeting Thursday, Tsipras criticized the hardliners who voted against him, arguing that their decision was “in conflict with the principles of comradeship and solidarity and at a crucial time creates an open wound,” according to a government official at the meeting. The official revealed details of the closed-door meeting on condition of anonymity.

The dissenters' decision, Tsipras said, forced him to continue governing with a minority government until Greece's bailout deal is concluded — something expected to take a month or more.

The Associated Press

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