German official says Tsipras criticism unhelpful

Greece’s leftwing Prime Minister Alexis Tsipras faces a showdown with rebels in his own party yesterday furious at his capitulation to German demands for one of the most sweeping austerity packages ever demanded of a euro zone government.

Greek Prime Minister Alexis Tsipras was seeking Tuesday to rally his party members to support a preliminary rescue deal struck with Greec…

Earlier on Wednesday, French Finance Minister Michel Sapin and Economy Minister Emmanuel Macron both played down a warning by the global Monetary Fund that Greece would need more debt relief than that offered by European governments so far, saying that was already France’s view.

Next Monday Greece owes the European Central Bank 4.2 billion euros and a default would force the ECB to cut off emergency loans keeping Athens banks afloat.

The Fund also warned that given “considerable” downside risks to the country’s economic situation, Greece could need more than the €85 billion (RM357.91 billion) tentatively agreed on Monday for the country’s third bailout.

“The deal … is unacceptable”, Energy Minister Panagiotis Lafazanis, a Syriza hard-liner, said in a statement.

“These laws will pass through parliament today, because they can’t do otherwise”, said Eleni Sari, 45, as she walked through central Athens.

Tsipras said the establishment of the fund meant ordinary Greeks’ savings were safe, but added that the reopening of the banks – which have been closed for over a week – depended on the finalising of the deal, which could take a month.

The violence erupted on the sidelines of a demonstration gathering 12,500 people in front of Parliament building opposed to the passage of the reforms. The accepted deal has debt restructuring after 2022 and covers Greece’s mid-term fiscal needs.

Civil servants protested with a 24-hour strike that disrupted public transport and shut down state-run services across the country.

He called the agreement reached between Greece and European leaders “not very concrete”, with some key issues not discussed.

The vote will nearly certainly see large numbers of Tsipras’s own Syriza lawmakers dissent and vote against the package, raising questions of his government’s survival in its current form.

The Prime Minister’s official spokeswoman said: “We have always been clear that British taxpayers’ money is not going to be used to provide financing for a eurozone/Greek deal, and that therefore this is a non-starter”.

After a stunning win in a referendum that rejected calls for more austerity, Tsipras remained in a bind this week as he reached a deal with creditors: Greece’s cash-starved banks would likely have collapsed, sending the country spiraling out of the euro, Europe’s joint currency.

Eurozone finance ministers are looking for options on a bridge loan, which was part of the agreement, for Greece.

Lawmakers are due to vote after midnight on the raft of tax hikes and pension reforms that are hard to accept for many in a country where unemployment has jumped above 25 per cent and the economy has shrunk by a quarter in the course of two previous bailouts.