IMF Seen Joining Greek Deal

The new three-year bailout package – Greece’s third bailout in little more than five years – is worth a total of 86 billion euros ($96 billion), and the gradual disbursement of funds depends on the Greek government implementing a series of reforms, including steep tax hikes and spending cuts.

The measure passed with near unanimous support from the Social Democrats, who govern in coalition with Merkel’s conservatives.

Still, the scale of the rebellion in CDU-CSU ranks was less than feared after Merkel joined her finance minister, Wolfgang Schaeuble, in lobbying hard to contain the number of “no” votes in yesterday’s debate on Greek aid.

Finance Minister Wolfgang Schaeuble has described the IMF’s role as “indispensable”.

In July, 65 members of Merkel’s own Christian Democratic Union party voted against any negotiation of a third bailout for Greece and many in the legislature remain skeptical Greece can undertake such comprehensive reforms, areas in which it has failed in the past.

Greece’s bailout is getting its final approvals in parliaments in several European states.

The German parliamentary approval was never in doubt but in a similar vote last month, 60 members of Merkel’s conservative bloc voted against. The Dutch parliament votes today.

“Of course, after the experience of the last years and months there is no guarantee that everything will work and it is permissible to have doubts”, he said.

The debate has been given added spice this time after Volker Kauder, head of the conservatives’ bloc in parliament, incensed fellow lawmakers earlier this month with threats of retaliation if they rebelled and voted against a bailout.

A German transport company appears to be moving ahead with buying the rights to operate 14 regional airports in Greece, as the Greek government submits to privatization deals as part of a new bailout deal to its European creditors. Germany has been the largest single contributor to Greece’s previous two bailouts, which amounted to nearly 240 billion euros (currently $266 billion). Many lawmakers have voiced concern that it is still uncertain whether the IMF will participate in the package, as the fund has said Greece requires comprehensive debt relief that eurozone governments aren’t yet willing to undertake.

MPs from the Bundestag lower house of parliament will be called back from the summer recess to vote on the bailout. “And whether it is used, only the Greeks will decide” he said.

“There are serious risks, such as execution risks, given the Greek political situation”, Economy Minister Luis de Guindos told parliament in a special session on the deal Greece reached with its creditors, seen as helping it stay in the euro zone. Merkel voiced confidence on Tuesday that the worldwide Monetary Fund would help provide loans, while Schaeuble told lawmakers on Wednesday that extending Greece’s financial lifeline is in Europe’s interest.