Greece seeks immediate bailout relief after voting through austerity package

Greece seeks immediate bailout relief after voting through austerity package

Greece is seeking urgent relief from European lenders after pushing a harsh austerity package through parliament, triggering a revolt in the governing party and violent demonstrations in central Athens.

Finance ministers from countries using the euro currency were planning a conference call to consider rescue financing for Greece, while the European Central Bank will mull a request from Athens to increase emergency assistance to troubled Greek banks that have been closed since June 29.

The bill was the first step in meeting requirements for negotiations to start on a desperately needed third international bailout for Greece – a three-year €85bn package – that will prevent it from crashing out of Europe’s common currency.

Prime Minister Alexis Tsipras and other eurozone leaders reached the deal after a marathon summit in Brussels last weekend, with Mr Tsipras saying he had no option other than to accept the harsh terms offered by lenders to ensure his country’s financial system didn’t collapse.

“We had a very specific choice: A deal we largely disagreed with, or a chaotic default,” he told parliament ahead of the post-midnight vote.

The country’s politicians voted 229-64 to implement more austerity measures that include pension reforms and sweeping sales tax hikes. Approval came thanks to pro-European opposition parties who voted in favour, and in spite of deepening dissent within Mr Tsipras’ left-wing Syriza party.

Thirty-eight party lawmakers defied Mr Tsipras – nearly one-in-four – by voting against or abstaining. They included Mr Tsipras’ powerful energy minister, the speaker of parliament, and Yanis Varoufakis, the former finance minister who headed Greece’s bailout strategy until his replacement 10 days ago.

“The Greek parliamentary vote averts an immediate disorderly default and potential exit from the euro area, but risks remains elevated given Greece’s weak institutions and substantial political scepticism on the bailout conditions,” the Moody’s credit ratings agency said.

The government described the vote as marking a “serious division” among its lawmakers, and indicated that dissenters in Mr Tsipras’ Cabinet would be swiftly replaced in a reshuffle.

“Today, Parliament took the first important step for the deal, voting for the difficult measures,” government spokesman Gabriel Sakellaridis said.

“But the results of today’s vote constitute a serious division in the unity of Syriza parliamentary group,” he said. “The prime minister’s and the government’s priority is the successful conclusion of the agreement in the immediate future.”

The vote came after more than two weeks of capital controls, with banks and the stock exchange shut since June 29 and ATM cash withdrawals limited to €60 per day.

Greeks have seen a dramatic decline in living standards since the debt-plagued country lost market access in 2010 and had to impose severe spending cuts in exchange for bailout loans from eurozone countries and the International Monetary Fund.

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.

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