Greece’s euro partners approve billions in new loans for third bailout

The banks are being kept afloat by emergency cash from Europe’s central bank, but urgently need a longer term solution.

Although the austerity plan was approved by a comfortable majority in the Greek parliament, the result was a blow to Prime Minister Alexis Tsipras (TSEE’-prahs).

If he loses that vote he may be forced to resign or call a fresh round of elections.

On Thursday, the bill was argued over in committee discussions for about nine hours, delaying the start of the main parliamentary debate until 4 am.

Tsipras told lawmakers that the bailout package is a “necessary choice” for the nation, despite unwelcome tax hikes and spending cuts.

Syriza would be weakened by the departure of the faction led by Lafazanis.

“This means that the “new” Syriza – the party likely to win the largest amount of votes and seats – will have to strike another coalition deal to govern”.

The Hellenic Statistical Authority in Athens said gross domestic product rose 0.8 percent, as it revised up its estimate for the first quarter to show stagnation.

This is only the beginning.

The rescue – Greece’s third since 2010 – should secure its place in the euro, for now.

Even before the vote revealed the depth of anger against the austerity measures, Syriza was edging towards a split.

According to officials, a total of some €13 billion would be disbursed for Greece by August 20.

It is disputed whether figures from the Greek statistics agency, showing slight economic growth for the second quarter of this year, are accurate.

Greek MPs backed the deal on Friday morning after a marathon all-night session marked by procedural delays and often angry exchanges in parliament.

“We must nonetheless remain cautious because of course we are providing huge sums of money”, German Finance Minister Wolfgang Schaeuble said. The agreement is awaiting approval by several parliaments of eurozone countries, among them Germany. In addition, private sector creditors agree to write off more than 100 billion euros, about half the debt owed to them.

The general reaction from European governments to Syriza’s capitulation, however, was positive. The issue will not be discussed, however, before a first positive review of the new deal is made in October.

The EU Commission, meanwhile, is confident that “a positive outcome is entirely feasible today” at the eurozone meeting in Brussels, spokeswoman Annika Breidthardt said.

“It is equally critical for medium and long-term debt sustainability that Greece’s European partners make concrete commitments…to provide significant debt relief, well beyond what has been considered so far”, International Monetary Fund chief Christine Lagarde said in a statement.