Taoiseach concerned about key Greek vote
EU leaders agreed to give Greece a second multi-billion euro bailout from the EU and the IMF — provided the government can muster sufficient votes to pass another austerity programme next week.
Mr Kenny echoed the views of the other leaders when he said: “It is imperative that this should go through.”
He made it clear that he was concerned about the consequences of a ‘no’ vote for Ireland and said he spoke about it, asking for reassurances that Ireland would be protected in such an event.
“I made it perfectly clear to the council that in no circumstances did I want a situation where if anything untoward were to happen in the case of Greece that it would have serious consequences for Ireland.
“A country like ours which is now measuring up and making a new direction has to be protected in the event of anything untoward happening in the case of Greece, and that clarification was given.”
Both Ireland and Portugal were praised for the way in which they were implementing their programmes, with German Chancellor Angela Merkel telling journalists that she was “very impressed” by the government’s presentation of the steps they were taking to escape from the crisis and said it offered a very positive example.
The IMF approved the conditions for the new Greek bailout before EU leaders consented to them at their summit in Brussels yesterday — clearing the way for an immediate injection of €12 billion next month and an additional €50bn over the next year. This is in addition to the €110bn given last year.
But first the government of prime minister George Papandreou, with its slim majority of just five in parliament, must pass two rounds of votes next Tuesday and Thursday.
In this they will agree to another round of tax increases and spending cuts amounting to around €28.4bn over the next three years and to selling off state assets including shares in electricity and telecoms companies to raise an additional €30bn.
Greece will begin taxing minimum-wage earners and encourage local banks to help the state delay debt payments for bonds maturing as late as 2015.
Mr Papandreou said he was confident of getting the 151 minimum number of votes he needs next week.
“National responsibility will preside in the parliament vote,” he said.
The main Greek opposition party has said it will vote against the austerity despite coming under heavy pressure from EU leaders to sign up to the deal.
If the vote goes through then eurozone finance ministers will hold a special meeting on Sunday, July 3, to work out the final details of the financing.
One of the major hurdles still to be cleared is the issue of how to involve private creditors, mainly banks, in agreeing to extend the length of their loans by about seven years.
This could effectively raise another €30bn for the Greeks but it must be done with the agreement of the banks — otherwise it will be seen as a default.
This would lead to the collapse of the Greek economy inflicting serious damage on banks especially in France, Germany, Spain and Belgium.
Negotiations are under way with the banking sectors in various countries.
The new measures promoted Greece’s largest union, the GSEE, to call a 48-hour strike for next Tuesday and Wednesday.
Yesterday, more than 3,000 officers from the police, coastguard and fire service — most wearing their uniforms — protested in central Athens.
