Greek bailout package examined across Europe
Published 12/08/2015 | 10:58
Details of Greece's latest bailout package are being pored over across Europe as Prime Minister Alexis Tsipras insisted the agreement with creditors would put "a definitive end" to the country's economic uncertainty.
Mr Tsipras has called an emergency session of parliament to discuss and vote on the bill, which includes painful tax hikes and spending cuts, in time for a confirmed meeting Friday of the eurozone's 19 finance ministers in Brussels.
The so-called eurogroup has to sign off on the bailout deal - as do a few parliaments - so the funds on offer can be released in time for Greece to avoid defaulting on a big debt repayment to the European Central Bank (ECB) on August 20. The three-year bailout is worth about 85 billion euro (£61 billion).
To restore trust and rebuild confidence they say has been damaged over the past few months, Greece's creditors have insisted that lawmakers approve about 40 pieces of legislation by Thursday, and meet several other conditions by October.
Although Mr Tsipras is facing fierce opposition from hardliners within his left-wing Syriza party over the bailout, the bill is expected to pass in the 300-member parliament as MPs in pro-European opposition parties have said they will back the agreement.
While all technical aspects of the deal have been finalised, it still needs the approval of the other 18 eurozone nations' finance ministers.
EU economic affairs spokesperson Annika Breidthardt said lower level finance officials would discuss the agreement by phone on Wednesday evening.
Several countries, including Germany, which has been Greece's harshest critic and is its most influential creditor, must then also ratify the deal in their own parliaments before any funds can be disbursed.
EU officials say the deal aims to eliminate any uncertainty over reforms required from Greece and that "up-front action" is needed from Athens to gain access to the funds.
"We have not gone for a quick fix, we have not cut corners," one official said. "This is a comprehensive agreement."
The bailout is based on sharply worsened economic growth projections following months of uncertainty and political turmoil that included the Greek government imposing banking restrictions to prevent an all-out bank run. After shrinking 2.3% this year and 1.3% the next, the Greek economy is expected to return to growth of 2.7% in 2017.
Germany said it was still assessing the agreement.
Chancellor Angela Merkel's spokesman, Steffen Seibert, said Berlin wants to examine the deal with "the necessary thoroughness" and that it's "too early for a clear evaluation".
In Athens, Mr Tsipras had asked the parliament's speaker to have the bill go through committee level on Wednesday, ahead of a full debate and vote by the end of Thursday.
But parliament speaker Zoe Konstantopoulou, a bailout dissenter within Mr Tsipras' left-wing Syriza party, scheduled the parliamentary procedure to start on Wednesday night. That delays the process and could mean a vote would likely be held in the pre-dawn hours of Friday.
The agreement sees Mr Tsipras accepting measures he had resisted until just a few months ago: the sale of some state property, deep cuts to pensions and military spending, and the ending of certain tax credits to people considered vulnerable.
The proposed bill includes legislation to open up protected professions to more competition, increasing personal, corporate and property taxes and abolishing early retirements.
Tax hikes cover sectors as diverse as diesel fuel for farmers, private school tuition and Greek-interest shipping, while small businesses and freelances will have to prepay the entire amount of the following year's taxes.
The deal also contains legislation on issues as detailed as where fresh bread can be sold, the expiry date of fresh milk and regulations on when stores can hold discount sales.