The Greek parliament has approved a new €85bn (£60bn) rescue package early this morning (14 July), following talks through the night that resulted in additional reforms being requested by creditors.
FTAdviser’s sister publication the Financial Times reported that the measures were approved with 222 votes for the motion, 64 against and 11 abstentions.
Out of 149 MPs from ruling leftwing party Syriza, 31 voted against the package - fewer than in two previous votes last month related to the bailout - while the abstentions reduced support for the governing party to below the 120 level needed to sustain a minority government according to the constitution.
Prior to the lengthy debate, legislators worked through nine hours of talks on procedure that revealed tensions between senior Syriza officials and Zoi Konstantopoulou, the speaker of parliament, who is opposed to the bailout deal.
She eventually allowed the debate to go ahead under emergency procedures so that the package could be presented for discussion at Friday’s meeting of eurozone finance ministers.
Approval by the Greek parliament of the three-year package of fiscal and structural reforms is one of the conditions set by creditors for making an aid payment of €23bn (£16.4bn).
This would enable Greece to make a €3.2bn (£2.3bn) payment due to the European Central Bank on August 20, as well as covering further loan repayments to the International Monetary Fund and providing more capital to the country’s four largest banks.
Additional reforms to raise the retirement age for public sector workers and lift restrictions on bank foreclosures on low-income homeowners were agreed under pressure from bailout monitors from the ECB, IMF, European Commission and European Stability Mechanism.
These measures were met with strong opposition from Ms Konstantopoulou and a group of legislators from Syriza’s hardline Left Platform, who have threatened to split with prime minister Alexis Tsipras.
David Madden, market analyst at spread betting firm IG, pointed out that in mid-morning trading, the FTSE 100 was trading higher after Athens passed its third bailout package.
“The Greek government overwhelmingly voted in favour of accepting the bailout, but there are concerns that a number of politicians who voted in favour of the deal will turn on the government when it comes to the confidence vote.
“Whatever bullish sentiment equities have at the moment is being restricted by the possibility of a snap election. Syriza was swept to power in January, and even though the recent Greek growth numbers were good, there is still a lot of discontent within the country.”
peter.walker@ft.com
