Greek lawmakers back third bailout after all-night debate

Greek lawmakers approved their country’s draft third bailout in a parliamentary vote Friday that relied on opposition party support and saw the government coalition suffer significant dissent.

The vote came after a marathon all-night session marked by procedural delays and acrimonious debate over the three-year, approximately 85-billion-euro ($93-billion) rescue package that includes harsh spending cuts and tax hikes.

Greece is unable to borrow on international markets, and another bailout is all that stands between it and a disorderly default on its debts that could see it forced out of Europe’s joint currency.

The vote was passed with 222 votes in favor, 64 against, 11 abstentions and three absent in the 300-member parliament.

Prime Minister Alexis Tsipras has come under intense criticism from hard-liners within his own radical left Syriza party, who say he has capitulated to creditor demands to introduce the austerity measures. About a quarter of his party’s lawmakers voted against the bill. The mounting discord, which began with a slightly smaller number dissenting in a previous bailout-related vote last month, is threatening to split his party and could lead to early elections.

Greece needed to pass the bill ahead of a meeting of Eurozone finance ministers in Brussels on Friday afternoon, where the ministers will decide whether to approve the draft agreement.

The deal will also need approval from the parliaments of several other countries, including that of Greece’s harshest critic, Germany, before any funds can be disbursed. Some nations, such as Finland, have already given their approval.

Dissenters in Tsipras’ party angrily challenged the government, accusing it of reneging on anti-austerity promises it made before winning elections last January.

“I feel ashamed for you. We no longer have a democracy ... but a Eurozone dictatorship,” prominent party member and former energy minister Panagiotis Lafazanis said ahead of the vote. Lafazanis on Thursday co-signed a declaration along with another 12 left-wing politicians declaring they would start a new anti-austerity movement. He stopped short of quitting Syriza outright, however.

Tsipras’ party won elections in January on promises to repeal similar budget austerity imposed in return for Greece’s two previous bailouts. His about-face, agreeing this week to tough terms with creditor negotiators from the European Central Bank, the European Commission and the International Monetary Fund, has led to the outrage among the hard-liners that now threatens to split the party.

“We took a painful decision of responsibility, and took a step back,” Tsipras said in his defense of the bailout. “Our position cannot be served by escape or by fantasy. We took the decision to remain alive instead of committing suicide and complaining how unfair it was.”

Tsipras said Germany, and in particular its finance minister, Wolfgang Schaeuble, was attempting to undermine Greece and its position in Europe’s joint currency, and would rather see Greece kicked out of the euro.

“In a few hours ... using unfair arguments and unfair demands, there will be an effort from the side of Mr. Schaeuble to take back what has been agreed,” he said, referring to the finance ministers’ meeting scheduled for later in the day. “That would not be a defeat for [Greek Finance Minister Euclid] Tsakalotos, or for Greece, but for Europe.”

Greece is anxious for the deal to be completed in time for it to receive funds ahead of a big debt repayment to the European Central Bank due on Aug. 20. Without the money, it would default.

Tsakalotos insisted that Greece does not want an interim loan, which some creditors have proposed as a solution if the main bailout deal cannot be finalized with all creditors in time.

However, senior EU finance officials overnight tasked the European Commission with drawing up a “contingency plan” for a new interim loan as a safety net, said an EU official who was not permitted to speak on the record due to departmental rules.

Such a loan would take care of Greece’s Aug. 20 debt payment and buy more time for Eurozone members to tweak the plan.

Germany has so far maintained a cautious stance.

German Deputy Finance Minister Jens Spahn on Thursday stressed the importance to Germany of getting a clear signal from the International Monetary Fund, which participated in Greece’s two previous bailout, that it will remain a part of the rescue program.

The IMF, however, insists that Greece needs debt relief of some sort. It calculates that the country’s debt, currently at 180% of GDP, is unsustainable.

“We look forward to working with the authorities to develop their program in more detail and for Greece’s European partners to make decisions on debt relief that will allow Greece’s debt to become sustainable,” said Delia Velculescu, the IMF’s negotiator on Greece in this round of bailout talks.

Velculescu said the IMF “will make an assessment of its participation in providing any additional financing to Greece once the steps on the authorities’ program and debt relief have been taken, expected at the time of the first review” of the third bailout, which would occur three months after it begins.