German minister ‘expects agreement’ on Greece

The bill on the rescue deal passed just in time for Greek Finance Minister Euclid Tsakalotos to head to Brussels to meet his counterparts from the 19-country currency union in the hope of getting their seal of approval as well.

The move saves Greece from a disorderly default on its debts which could have come as soon as next week and helps to cement its membership of Europe’s single currency, but means more hardship for ordinary Greeks.

Tsipras’ radical left party won elections in January on promises to repeal similar budget austerity imposed in return for Greece’s two previous bailouts.

The bill includes reforms increasing personal, company and shipping taxes, reducing some pensions, abolishing tax breaks for some groups considered vulnerable and implementing deep spending cuts, including to the armed forces.

A senior lawmaker, Makis Voridis, from the opposition New Democracy said his party would vote against Tsipras’s coalition, raising the odds it would be toppled.

German MPs will be recalled from holiday on Wednesday to vote on the proposed bailout for the Greek economy, Bundestag speaker Norbert Lammert said on Saturday. “Therefore, as the prime minister said during his speech, everything that is necessary will be done, adhering always to the regulations (of parliament) and the constitution”.

“Outright debt forgiveness doesn’t work at all under European law”, Schaeuble said.

Culture Minister Nikos Xydakis, speaking on state television, said early elections were now likely. The creditors have agreed to consider the issue only after a review in October of the government’s implementation of its side of the deal.

A second tranche up to 15 billion euros can be made available no later than November. 15, which aims “for banking recapitalisation and resolution needs”, the statement said.

Still, some of those who rebelled on Friday could still opt to support the government in a confidence vote, as could other pro-European parties such as the centrist Potami and the centre-left PASOK, leaving the final outcome unclear.

“The fight against the new bailout starts today, by mobilizing people in every corner of the country“, said a statement signed by Lafazanis and 11 other Syriza members. He stopped short of quitting Syriza.

His about-face, agreeing this week to tough terms with creditor negotiators from the European Central Bank, European Commission and worldwide Monetary Fund, has led to outrage among hardliners that now threatens to split the party. “Our position can not be served by escape or by fantasy”.

His government “had taken on the responsibility to continue the fight rather than commit suicide and then go running to other worldwide forums saying it wasn’t fair that we had to kill ourselves”, he added.

“Interest rates need to be as low as possible, maturities have to be as long as possible – these things have to be re-managed to provide oxygen to the Greek economy“, French Finance Minister Michel Sapin said on France Inter radio on Friday as voting got underway.

The bailout package, Greece’s third since 2010, spells out the details of the economic overhaul the government committed to in exchange for the loans.

Germany has so far maintained a cautious stance.

Discussion will focus on the health of Greek banks, which have accumulated an array of underperforming loans during five years of crisis, and on how to ease Greece’s debt burden without writing some of it off outright.